Which of These Statements Is Not True

question 95

Multiple Choice

Which of these statements is not true?

• A) Transactions to reduce risk are unlikely to add value if investors can easily undertake similar transactions.
• B) Hedging may reduce the costs of financial distress.
• C) Transactions to reduce risk always add value.
• D) Hedging is a zero-sum game.

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Definitions:

Credit Availability

The ease with which individuals and businesses can obtain loans or credit, often influenced by interest rates and economic policies.

Price Level

A measure of the average prices of goods and services in an economy at a given time.

Federal Deregulation

The process of removing government restrictions and rules in industries to increase efficiency and competition.

Interest Rates

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, typically over a one-year period.