When We Talk About the Financial Management of Derivatives for Non-Financial

question 53

Multiple Choice

When we talk about the financial management of derivatives for non-financial companies, it should be designed to reduce risk but is subject to a number of risk factors, those include:

• A) Companies should not over insure the risk.
• B) Companies can be unsure about what risks the company is going to take and what risks the company is not going to take.
• C) Derivatives should never be related to an underlying transaction.
• D) When companies want to avoid risks, they should always use derivatives.