Which of the Following Statements Holds True for Hedging

question 91

Multiple Choice

Which of the following statements holds true for hedging?

• A)It refers to using financial instruments to reduce adverse price movements by taking an offsetting position.
• B)It refers to the simultaneous and instantaneous purchase and sale of a currency for a profit.
• C)It refers to a strategy that ensures that a change in interest rates does not affect the value of a portfolio.
• D)It refers to the practice of buying and selling a currency with the expectation that the value will change and result in a profit.
• E)It refers to the method of bringing all financial statements of a parent and its subsidiaries into a single financial statement.

---

Definitions:

Procurement

The process of finding, acquiring, buying goods, services, or works from an external source, often via a tendering or competitive bidding process.

Goods And Services

The outputs offered by businesses and individuals which can be tangible products or intangible activities performed for others.

Within The Organization

Refers to actions, processes, or dynamics that occur inside a company, institution, or group.

Procurement Organization

An entity responsible for acquiring goods and services needed by a company or institution to function effectively.