What Is the Objective of a Cash Flow Hedge

question 127

Multiple Choice

What is the objective of a cash flow hedge?

• A)To offset the losses due to changes in the value of an asset or liability
• B)To reduce the risk associated with future cash flows
• C)To predict future cash flows
• D)To predict the value of an asset or minimize the value of a liability
• E)None of the options are correct

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Definitions:

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The complex framework of societal institutions, social relations, and norms that shape the behavior and interactions of individuals within a society.

Consensual Nature

Pertains to the aspect of agreements or decisions that are reached by all members of a group collectively.

Kingsley Davis

A sociologist and demographer known for his work on human society, population, and urbanization.

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