Which of the Following Is True About the Use of Derivatives

question 34

Multiple Choice

Which of the following is true about the use of derivatives?

• A)Derivatives usually appear explicitly in the financial statements.
• B)Academic surveys account for much of our knowledge of corporate derivatives use.
• C)Smaller firms are more likely to use derivatives than large firms.
• D)Frequently, firms use derivatives where financial distress costs are low.
• E)None of the above are true.

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Definitions:

Programmed

Designed or set up to follow a specific sequence of operations or instructions to achieve a particular outcome.

Emitted

The act of sending or discharging something, such as light, heat, or a behavior, often in response to specific stimuli or conditions.

Elicited

Drawn out or brought forth in response to a specific stimulus or set of circumstances.

Classical Conditioning

The acquisition of knowledge through the linkage between a stimulus found in the environment and one that happens naturally.