Financial Derivatives Are Powerful Tools That Can Be Used by Management

question 55

Multiple Choice

Financial derivatives are powerful tools that can be used by management for purposes of:

• A) speculation.
• B) hedging.
• C) human resource management.
• D) A and B above

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Definitions:

Short-Run Profits

Earnings that occur when a firm can cover its variable costs, occurring in a period short enough that at least one input is fixed.

Diversity

The representation and inclusion of individuals from a variety of backgrounds, perspectives, and experiences in a group or organization.

Tacit Collusion

An unspoken, non-explicit agreement among competitors to maintain prices at a certain level or to not compete on certain aspects, without direct communication.

Few Firms

A market condition characterized by a small number of companies, often leading to an oligopolistic competition where each firm's actions can significantly impact the market.