Information-Based Reasons for Hedging Translation Exposure Include Each of the Following

question 17

Multiple Choice

Information-based reasons for hedging translation exposure include each of the following EXCEPT

• A) The quality of accounting information can be improved.
• B) Meeting profit forecasts retains management's credibility in the marketplace
• C) Information costs can be reduced in a perfect market.
• D) Credit ratings are tied to accounting performance rather than cash flow.
• E) Loan covenants are tied to accounting income.

---

Definitions:

Celiac Trunk

A major artery originating from the abdominal aorta that supplies blood to the stomach, spleen, liver, and other organs of the upper abdomen.

Pulmonary Trunk

A major blood vessel that carries blood from the heart to the lungs for oxygenation.

Abdominal Aorta

The portion of the aorta that passes through the abdomen, supplying blood to the abdominal organs.

External Iliac Artery

A major artery that supplies blood to the lower limbs, originating from the common iliac artery and continuing as the femoral artery.