While Hedging Through Interest Rate Futures Reduces or Eliminates the Risk

question 52

Multiple Choice

While hedging through interest rate futures reduces or eliminates the risk of loss, it also:

• A)is illegal in some cases.
• B)has not been accepted by most corporate financial managers.
• C)eliminates the possibility of an abnormal gain.
• D)None of the above

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Definitions:

Customer Tastes

Refers to the preferences, attitudes, and beliefs of consumers that influence their buying behavior for certain products and services.

Technology-Related

Pertaining to or involving technology, especially relating to advancements or applications in the field.

Commissions Earned

Income received by salespersons or brokers as a percentage of the sales they make, serving as motivation and compensation for their sales efforts.

Revenues

The total income generated by a company from its business activities.