A Firm Wants to Hedge a Potential Transaction but Is

question 98

Multiple Choice

A firm wants to hedge a potential transaction but is also concerned about the possibility that it may not take place.In this case it is better to hedge potential risks using:

• A)options.
• B)forwards.
• C)futures.
• D)a cash-and-carry strategy.
• E)the spot exchange rate.

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Definitions:

Aggressive Response

A reaction characterized by actions or words meant to harm or intimidate.

Components

The distinct parts or elements that combine to form a whole system or complex entity.

Cognitive Theorists

Scholars and psychologists who study the mental processes such as perception, memory, thought, and problem-solving, emphasizing how individuals acquire, process, and store information.

Depressive Symptoms

Indicators of depression such as persistent sadness, loss of interest in activities, changes in appetite or sleep, and feelings of worthlessness.