Firms Use Options to Speculate Not to Reduce Risk

question 28

True/False

Firms use options to speculate not to reduce risk.

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Definitions:

Enforceable

Capable of being imposed or applied, especially in legal contexts.

Procedurally Unconscionable Contract

A contract that is deemed unfair or unjust due to the process in which it was made, often involving lack of negotiation or imbalance in bargaining power.

Adhesion Contract

A contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis. Such contracts are legal but are sometimes rescinded on the grounds of unconscionability and the absence of one party’s free will to enter a contract.

Defamation

A false statement or an action that harms the reputation or character of an individual, business, product, group, government, or nation.