If Financial Instruments Are Used to Reduce the Uncertainty of Future

question 52

Multiple Choice

If financial instruments are used to reduce the uncertainty of future cash flows, they are being used to:

• A) hedge.
• B) increase return.
• C) increase risk.
• D) speculate.

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Definitions:

Boycotts

The refusal to buy, use, or participate in something as a way of protesting, often used to exert pressure on companies or governments to change policies or conduct.

Bargaining Strength

The power and leverage that one party holds over the other in a negotiation process, often influencing the terms of the agreement.

Bargaining Power

The capacity of one party in a negotiation to influence the terms in their favor due to their position or resources.

Strike Activity

Refers to the actions taken by workers, typically organized by labor unions, to cease work in order to protest for better wages, working conditions, or other labor-related issues.