Which of the Following Is Cited as a Good Reason

question 38

Multiple Choice

Which of the following is cited as a good reason for NOT hedging currency exposures?

• A) Shareholders are more capable of diversifying risk than management.
• B) Currency risk management through hedging does not increase expected cash flows.
• C) Hedging activities are often of greater benefit to management than to shareholders.
• D) All of the above are cited as reasons NOT to hedge.

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Definitions:

Moynihan

Daniel Patrick Moynihan, an American sociologist, politician, and diplomat, known for his work on family and welfare issues.

Culture of Poverty

A theory suggesting that poverty creates a unique set of values, beliefs, and behaviors that are passed down from generation to generation, making it difficult for individuals to escape poverty.

Mixed Race

Refers to people who have ancestry from different racial groups, emphasizing the diversity in their heritage.

Racial Categorization

The classification of individuals into groups based on physical characteristics, such as skin color or facial features.