It Can Be Argued That, While Financial Hedging Can Be

question 98

Multiple Choice

It can be argued that, while financial hedging can be used to stabilize a firm's cash flows,

• A)it is not a substitute for long-term operational hedging.
• B)it is therefore a substitute for long-term operational hedging.
• C)it is inferior to money market hedging.
• D)none of the above.

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Definitions:

Related Party

Individuals or entities that have a connection to the reporting entity that could influence the financial and operating policies of the entity.

Domestic Partner

An individual who lives with another in a long-term relationship similar to a marriage, recognized by some jurisdictions for legal and financial benefits.

Reporting Entity

An entity that is required, or chooses, to prepare financial statements.

CEO

Chief Executive Officer, the highest-ranking person in a company or other institution, ultimately responsible for taking managerial decisions.