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:

Spontaneous Recovery

The reappearance of conditioned responses after a period of rest and without further conditioning.

Waterfowl

Aquatic birds that are typically found in freshwater or sea near coastlines, including ducks, geese, and swans.

Higher-order Conditioning

A form of learning in which a stimulus is first made meaningful or consequential for an organism through an initial step of learning, and then that stimulus is used as a basis for learning about some new stimulus.

Second CS

In classical conditioning, a new neutral stimulus that becomes associated with the conditioned stimulus, leading to a conditioned response.