Hedging operational risk covers a firm's activities in production and sales
(i.e., expenses and revenue). These operational risks can be considered as income statement risks. However, financial risks relates to a firm's balance sheet (i.e., assets and liabilities). By making
the realistic assumption that there are some imperfections in the financial markets, a firm could benefit from hedging financial risk. Hedging activities should cover both the firm's assets and
liabilities to fully account for the risks.