Where the Hedge Arrangement Completely Eliminates the Consequences of Adverse

question 17

Multiple Choice

Where the hedge arrangement completely eliminates the consequences of adverse exchange-rate fluctuations,the purchase or sales arrangement is considered to be:

• A) partially hedged.
• B) positively hedged.
• C) perfectly hedged.
• D) negatively hedged.

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Essential Raw Materials

Fundamental inputs necessary for the production of goods, often considered critical for a country's economy and security.

Patents

Legal rights granted by the government to inventors, giving them exclusive rights to their inventions for a certain period of time.

Inelastic Segment

A portion of the demand curve where consumers are relatively unresponsive to price changes, resulting in a steep slope.