The Primary Method by Which a Firm May Protect Itself

question 2

Multiple Choice

The primary method by which a firm may protect itself against operating exposure impacts is

• A) money market hedges.
• B) diversification.
• C) forward contract hedges.
• D) balance sheet hedging.

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Definitions:

Defect

A flaw or imperfection in a product or system that can lead to its malfunction or inadequacy under expected conditions.

Notice

Formal information or warning about something given to a person or group.

Facts

Objective realities or pieces of information that are proven to be true through evidence.

Circumstances

Conditions or facts affecting a situation, event, or action, which may influence its outcome or the decisions made regarding it.