Which of the Following Is Cited as a Good Reason

question 38

Multiple Choice

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

• A) Shareholders are more capable of diversifying risk than management.
• B) Currency risk management through hedging does not increase expected cash flows.
• C) Hedging activities are often of greater benefit to management than to shareholders.
• D) All of the above are cited as reasons NOT to hedge.

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Definitions:

Picket Line

A boundary established by workers on strike, especially at the entrance to the place of work, to demonstrate and discourage others from entering the premises.

Termination

The act of ending something, such as a contract, employment, or legal relationship, usually in accordance with predetermined conditions or by mutual agreement.

Notice

Formal communication or announcement made to inform individuals of certain actions or events.

Labour Statutes

Laws specifically related to the regulation of employment conditions, worker rights, and employer responsibilities.