Which of the Following Is NOT Cited as a Good

question 23

Multiple Choice

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

• A) Reduced risk of future cash flows is a good planning tool.
• B) Reduced risk of future cash flows reduces the probability that the firm may not meet required cash flows.
• C) Currency risk management increases the expected cash flows to the firm.
• D) Management is in a better position to assess firm currency risk than individual investors.

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Definitions:

Taxpayers

Individuals or entities that are obligated to pay taxes to federal, state, or local governments.

Trade Barriers

Measures introduced by governments to restrict or control international trade, such as tariffs, quotas, and import bans.

Trade Restrictions

Measures implemented by governments to control the flow of imports and exports, often to protect domestic industries from foreign competition.

Special Interest Groups

Organizations or groups that advocate for the specific interests of their members, often influencing policy decisions and public opinion.