Which One of the Following Statements Is Correct in Relation

question 26

Multiple Choice

Which one of the following statements is correct in relation to a firm's short-run financial risk?

• A) Short-run financial risk results from permanent changes in prices due to new technology.
• B) A financially sound firm can become financially distressed as the result of its short-run exposure to financial risk.
• C) Each segment of a business entity should be responsible for hedging its own short-run financial risk.
• D) Short-run financial risk is defined as changes resulting from fundamental shifts in the underlying economics of a business.
• E) Thus far, hedging techniques have been unsuccessful in reducing short-run financial risk.

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Definitions:

Cerebral Palsy

A condition affecting body movement and muscle coordination, stemming from a stable brain injury or malformation that happens as the child's brain is being developed.

Hydrocephalus

Buildup of fluid pressure in the brain and, in infants, swelling of the head, if the flow of cerebrospinal fluid (CSF) is blocked; can result in intellectual impairment.

Prenatal Infections

Infections acquired by the fetus while in the womb, which can lead to various developmental issues or birth defects.

Laterally Located

Positioned on the side or sides of a body or structure.