A Busy Owner-Manager Is Trying to Cope with the Problem

question 85

Multiple Choice

A busy owner-manager is trying to cope with the problem of excessive time pressure that requires her to work 60 to 70 hours per week. She should realize that this work schedule is

• A) light, because 50 percent or more of all owner-managers work 80 hours or more per week.
• B) fairly typical, because many owner-managers work this amount or more each week.
• C) heavy, because more than one-half of all owner-managers work a normal 40 to 45 hour week.
• D) unusually heavy, because most owner-entrepreneurs function as idea people, leaving the details to others and working only 20 to 30 hours per week on average.

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Definitions:

Speculative Forward Contract

A financial derivative used to speculate on the future price of an asset, involving an agreement to buy or sell the asset at a future date for a price determined today.

Fair Value Hedge

A risk management technique that uses financial instruments to mitigate the risk associated with changes in the fair value of an asset or liability.

Firm Commitment

An agreement between a buyer and an underwriter in which the underwriter guarantees the sale of a certain amount of securities.

Cash Flow Hedge

A hedging strategy used to manage risk associated with variability in cash flows, typically related to interest rates or currency exchange rates.