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:

Random Expressions

Spontaneous or unpredictable verbal or facial expressions not guided by logical or clear reasoning.

Good Performance

The achievement of set goals or criteria at a high or satisfactory level, often evaluated in academic, professional, or athletic contexts.

Narcissism

A personality trait characterized by an exaggerated sense of self-importance, a need for excessive attention and admiration, and a lack of empathy for others.

Social Media

Digital platforms that facilitate the creation, sharing, and exchange of information and ideas through virtual communities and networks.