The Purpose of Hedging by a Company Is To

question 4

Multiple Choice

The purpose of hedging by a company is to:

• A) maximise cash flows and profits.
• B) minimise the variability of expected cash flows.
• C) decrease the uncertainty of reported cash flows.
• D) increase the expected cash flows.

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Definitions:

Upward Communication

Messages sent from the lower levels of the organizational hierarchy to the higher levels.

Lower Levels

Refers to the subordinate or base layers within a hierarchical structure or system.

Organizational Hierarchy

The arrangement of individuals within an organization into different levels of authority and segments based on job function or department.

Upward Communication

The flow of information from lower levels of a hierarchy to higher levels.