Which of the Following Is Not Generally Considered a Benefit

question 20

Multiple Choice

Which of the following is not generally considered a benefit of hedging?

• A) It reduces one or more aspects of business risk.
• B) It allows prices to be locked in advance.
• C) The costs of hedging are paid by the speculators.
• D) It can stabilize profits.

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Definitions:

Direct Labour

The workforce directly involved in manufacturing goods or providing services, where their labor can be directly tied to end products.

Variable Manufacturing Overhead

Costs in the production process that vary with the level of output, such as utilities for the machinery.

Specialized Machine Cost

The acquisition and operational costs associated with machinery that is designed for specific, specialized tasks in production.

Direct Labour

Workers who are directly involved in the production of goods or services.