Which of the Following Relationships Would Be Considered an Internal

question 26

Multiple Choice

Which of the following relationships would be considered an internal partnership?

• A) Relationships between functional units and employees of a firm
• B) Relationships between a firm and a competitor
• C) Relationships between a firm and its supplier
• D) Relationships between a firm and its customers

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Definitions:

Option Contract

A financial contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date.

Derivative Security

A financial instrument whose value is based on the value of another asset.

Economic Exposure

Long-term financial risk arising from permanent changes in prices or other economic fundamentals.

Cross-Hedging

Hedging an asset with contracts written on a closely related, but not identical, asset.