Why Would the Management of a Multinational Corporation Incur Real

question 20

Multiple Choice

Why would the management of a multinational corporation incur real costs to hedge accounting exposure, which is only on paper?

• A) Fluctuations in reported income may affect stock price.
• B) Management compensation may be tied to accounting income.
• C) Hedging can smooth income.
• D) All of the above

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Definitions:

Line Chart

A kind of graph that presents data as a sequence of points linked by linear segments, commonly utilized to depict temporal trends.

Histogram

A graphical representation of data using bars to show the frequency of numerical data intervals, emphasizing the distribution of data.

Time-series Data

A sequence of data points collected or recorded at successive time intervals.

Successive Points

Points or values that follow one another in a sequence or order.