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:

Dominant Strategy

A strategy that is the best for a player in a game regardless of the strategies chosen by the other players.

Cooperating

The act of working together towards a common goal or benefit, often seen in strategic partnerships between businesses or countries.

Prisoners' Dilemma

A situation in game theory where two individuals acting in their own self-interest do not produce the optimal outcome for either party.

Tit-For-Tat

A strategy in game theory where an entity responds to an action with a similar action, often seen in reciprocal altruism or in competitive contexts.