Assuming No Transaction Costs (I

question 26

Multiple Choice

Assuming no transaction costs (i.e., hedging is "free") , hedging currency exposures should ________ the variability of expected cash flows to a firm and at the same time, the expected value of the cash flows should ________.

• A) increase; not change
• B) decrease; not change
• C) not change; increase
• D) not change; not change

---

Definitions:

Maintaining

The act of preserving or keeping something in its current state or ensuring it continues to operate effectively.

Entrepreneurial Tendencies

Characteristics or behaviors that indicate a propensity towards starting and managing new business ventures.

Teamwork

The process of people actively working together to accomplish common goals.

Mentoring Systems

Programs that facilitate the guidance and professional development of individuals within organizations through mentor relationships.