Generally Speaking, a Firm with Recurrent Exposure Can Best Hedge

question 3

Multiple Choice

Generally speaking, a firm with recurrent exposure can best hedge using which product?

• A)Options
• B)Swaps
• C)Futures
• D)All of the above

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Definitions:

Sales Tax Payable

A liability account in a company's financial statements, representing sales tax collected from customers but not yet remitted to the government.

Sale

The exchange of a product or service for money, constituting the main operational activity for most businesses.

Liability Account

An accounting record that holds the amounts owed by a company to creditors, suppliers, or lenders.

Terms

Conditions under which a sale is made, including payment timeframe, discounts, and penalties for late payment.