Hedging Refers to Forming Contracts That Allow a Company to ________

question 64

Multiple Choice

Hedging refers to forming contracts that allow a company to ________.

• A) obtain funds for a short period without paying interest
• B) buy supplies in the future at designated prices
• C) finance long-term debt on a continuous basis
• D) engage in buyer-seller relationships with many firms
• E) issue letters of credit to buyers exterior to the home country

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Definitions:

Odds

The ratio of the probability of an event happening to the probability of it not happening; in gambling, it represents the amount won relative to the stake.

Unfriended

The act of removing someone from one's social networking friends list.

Probability

The quantification of the chance of an event happening, represented as a number from 0 to 1, with 0 meaning the event is impossible and 1 meaning the event is certain.

P-Value

The probability of observing data at least as extreme as the ones observed, under the assumption that the null hypothesis is true.