Which One of the Following Statements Is Correct in Relation

question 16

Multiple Choice

Which one of the following statements is correct in relation to a firm's short-run financial risk?

• A)Short-run financial risk results from permanent changes in prices due to new technology.
• B)A financially sound firm can become financially distressed as the result of its short-run exposure to financial risk.
• C)Each segment of a business should be responsible for hedging its own short-run financial risk.
• D)Short-run financial risk is defined as temporary price changes which result directly from natural disasters, such as tornadoes, droughts, and floods.
• E)Thus far, hedging techniques have been unsuccessful in reducing short-run financial risk.

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Definitions:

Screening Opportunity

The process of evaluating business opportunities to determine their viability and potential for success.

Action Plan

A detailed outline of the steps, tasks, and resources required to achieve specific goals or objectives.

Overall Schedule

A comprehensive plan that outlines all planned activities and their timelines in a project or operation.

Economics

The social science that studies how individuals, governments, firms, and nations make choices on allocating resources to satisfy their wants and needs.