If Managers Are Rational, They Will Only Hedge When They

question 73

Multiple Choice

If managers are rational, they will only hedge when they perceive that:

• A)Prices are headed in an adverse direction
• B)Derivative instruments are priced lower than actual value
• C)Risk reduction is preferable to higher potential profits
• D)They can increase their profitability by doing so

---

Definitions:

Flexible Work Schedules

Work arrangements that allow employees to vary their hours and days of work, providing greater personal freedom.

Work-home Conflict

A form of conflict where the demands of work and home responsibilities are incompatible and negatively affect each other.

Transition to Retirement

The process of adjusting from a working life to retirement, involving emotional, financial, and lifestyle changes to adapt to a new way of living.

Innovative Ways

Novel methods or approaches to solving problems or creating value.