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:

Needs

Fundamental requirements or necessities for physical and psychological well-being, such as food, shelter, esteem, and belonging.

Construction Corollary

A principle in George Kelly's personal construct theory that suggests people anticipate events by the meanings they place on their experiences.

Compatible Groups

Clusters of individuals or entities that exhibit a high degree of similarity or cohesion in preferences, values, or characteristics, facilitating harmonious interactions.

Construe Events

Interpreting or making sense of events by assigning meanings and significance to them.