A perfect hedge is a position taken up by an investor that would completely eliminate the risk of another existing position. Such a position would require 100% negative correlation to the investment to be hedged and is rarely found.

In real mathematical finance (not the idiocy on Yahoo) a "perfect hedge" is an asset which when added to a portfolio of different asset means that the resulting portfolio is risk-free and thus returns the risk-free rate.

This btw is the basis of just about all of derivatives pricing including Black-Scholes, futures/forwards pricing, swap pricing, etc. so I can't imagine why these people don;t know the answer and yet answer the question anyway.

Perfect hedge= 0 exposure ( no chance of win or loss)

Taking up two sets in such that either way, you won't make a loss. 2 sets would mean taking up a position which would cancel out any loss arising out of the other

Taking two positions that will offset each other if prices change. The upside on one is equal to the downside on the other so you can't lose.

Privet or Laylander be careful laylander grows very high very quickly