What Is Hedging? A. It Is a Method of Leveraging Returns When a Returns

question 60

True/False

What is hedging?
A. It is a method of leveraging returns when a company has foreign currency receivables or payables or has outstanding commitments that will be affected by changes in market prices.
B. It is a system for investing in financial instruments such that the entity is guaranteed increased returns and lower risks.
C. It is any activity, entered into by the entity, designed to increase returns and reduce risk.
D. It is an action taken with the object of avoiding or minimising possible adverse effects of movements in things such as exchange rates or market prices.
E. None of the given answers.

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Definitions:

Statistical Analysis

The application of statistical methods and techniques to collect, review, analyze, and draw conclusions from data.

Dependent Variable

In scientific research, it refers to the variable that researchers are interested in observing or measuring, which is expected to change as a result of manipulations to the independent variable.

Control Group

A group in an experiment that does not receive the experimental treatment, allowing for a comparison against the group that does.

Dependent Variable

The variable in an experiment that is affected by the manipulation of the independent variable, and is measured or observed.