When a Firm Authorizes Managers to Trade Contracts to Hedge,it

question 2

Multiple Choice

When a firm authorizes managers to trade contracts to hedge,it opens the door to the possibility of ________.

• A) expectation profit
• B) risk premium
• C) free cash flows
• D) speculation

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Definitions:

Conscience

Part of The Superego That Produces Guilt, depending on how acceptable behavior is.

Freud's Personality Theory

A theory proposed by Sigmund Freud that suggests personality is formed through conflicts among three fundamental structures of the human mind: the id, ego, and superego.

Id

In Freudian psychoanalysis, the part of the mind which is the source of instinctual impulses and demands for immediate satisfaction of basic needs.

Metaphor

A figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable, to suggest a resemblance.