Because Most Hedging Acts to Reduce Risk, Managers Should Expect

question 104

Multiple Choice

Because most hedging acts to reduce risk, managers should expect that hedging will:

• A) increase profits.
• B) decrease profits.
• C) increase the firm's stock price.
• D)stabilize the firm's dividend payout.

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Definitions:

Proactive

Denotes an approach that involves taking action in anticipation of future problems, needs, or changes rather than reacting to events after they occur.

Effective Follower

An individual who actively supports leaders and contributes to the achievement of goals with competence, commitment, and critical thinking.

Decisions

Conclusions or resolutions reached after consideration.

Misguided

Description applied to actions, decisions, or beliefs that are based on incorrect assumptions, leading to unintended outcomes.