If the Managers of a Firm Have a Greater Aversion

question 65

Multiple Choice

If the managers of a firm have a greater aversion to risk,then

• A) they are less likely to hedge.
• B) they are more likely to hedge.
• C) they are more likely to use derivatives to speculate.
• D) none of the above.

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Definitions:

Vertical Acquisition

The purchase of a company that operates within the same industry but at a different level of the supply chain.

Horizontal Acquisition

The process of a company acquiring another company in the same industry to increase its market share.

Hostile Takeover

An acquisition attempt by a company or individual against the wishes of the target company's management and board of directors.