Which of the Following Is NOT Cited as a Good

question 23

Multiple Choice

Which of the following is NOT cited as a good reason for hedging currency exposures?

• A) Reduced risk of future cash flows is a good planning tool.
• B) Reduced risk of future cash flows reduces the probability that the firm may not meet required cash flows.
• C) Currency risk management increases the expected cash flows to the firm.
• D) Management is in a better position to assess firm currency risk than individual investors.

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Definitions:

Continuity

The psychological principle that experiences or developments are gradual and cumulative rather than consisting of distinct and separate stages.

Pattern

A recognizable repetition of elements or designs, often identified in nature, human behavior, or manufactured objects.

Figure-Ground Relationships

A visual perception principle distinguishing an object (the figure) from its surrounding area (the ground).

Objects

Physical items that occupy space and have properties that can be perceived by the senses.