Which of the Following Statements Is True

question 48

Multiple Choice

Which of the following statements is true?

• A)Over-hedging will lead to a significant reduction in risk, but also in returns.
• B)In terms of risk and return, there is a linear relationship between an unhedged, a selectively hedged, a fully hedged and an over-hedged position.
• C)It is not possible to over-hedge a position.
• D)Over-hedging will lead to a significant reduction in risk, but also in returns, in terms of risk and return, there is a linear relationship between an unhedged, a selectively hedged, a fully hedged and an over-hedged position and it is not possible to over-hedge a position.

---

Definitions:

Short-Term Schedules

Timetables designed for managing and allocating resources and tasks over a short period, often to meet immediate production or service needs.

Aggregate Plans

Strategies for overall operations that are developed to facilitate the effective management of processes and resources to meet overall business objectives.

Master Schedules

Detailed plans that outline the timing and sequencing of production activities to ensure efficient operations and delivery of goods.

Sequence of Decisions

A series of choices made over time, each of which may be influenced by the outcome of previous decisions in various contexts such as strategic planning or operations management.