With Regard to Operational Hedging Versus Financial Hedging

question 29

Multiple Choice

With regard to operational hedging versus financial hedging,

• A)operational hedging provides a more stable long-term approach than does financial hedging.
• B)financial hedging, when instituted on a rollover basis, is a superior long-term approach to operational hedging.
• C)since they both have the same goal, stabilizing the firm's cash flows in domestic currency, they are fungible in use.
• D)none of the above

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Definitions:

Social Facilitation

The phenomenon that people tend to perform simple tasks better, or complex tasks worse, in the presence of others due to increased arousal.

Depersonalization

Depersonalization is a dissociative disorder where individuals feel detached from their own thoughts, feelings, or body, experiencing a sense of being an outside observer to themselves.

Obedience

The act of following orders or directions from authority figures, often studied in psychology to understand the extent and limits of social influence.

Reciprocity

A social norm of responding to a positive action with another positive action, fostering mutual benefit and cooperation.