Chase Manufacturers Has a Risk Profile That Shows the Firm

question 119

Multiple Choice

Chase Manufacturers has a risk profile that shows the firm adding value when sudden price fluctuations move upward and losing value when the price fluctuations move downward. If the company hedged its financial risk by purchasing a put option, then the company would most likely ______ value when prices rose and ______ value when prices fell.

• A) add; add
• B) add; lose
• C) maintain; maintain
• D) maintain; add
• E) add; maintain

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Definitions:

Productive

The efficiency with which inputs (such as labor and capital) are converted into outputs (goods and services).

Large Income

Substantial earnings or revenue, typically considerably higher than the average income, affording a high standard of living.

High Productivity

Indicates a significant output or efficiency in production or performance relative to the input of resources, time, or labor.

Technological Progress

The advancement and innovation in technology, leading to more efficient processes, improved products, and overall economic growth.