From a Strictly Conceptual Perspective,why Would Any Manufacturer Consider Hedging

question 9

Essay

From a strictly conceptual perspective,why would any manufacturer consider hedging their variable costs? Answer as if you own the company.

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Definitions:

AFLAC

An American insurance company that provides supplemental insurance to help cover expenses health insurance doesn't.

Triple Jump

An athletic event where the competitor makes a hop, a step, and then a jump in sequence.

Moral Hazard

Moral hazard occurs when an individual or entity has a tendency to take more risks because the negative consequences of those risks will be partially or fully borne by others.

Airbags

Safety devices in vehicles designed to inflate rapidly in the event of a collision to prevent occupants from striking interior objects or being ejected from the vehicle.