Which of the Following Statements Is FALSE

question 49

Multiple Choice

Which of the following statements is FALSE?

• A)Horizontal integration entails the merger of a firm and its supplier or a firm and its customer.
• B)Like insurance,hedging involves contracts or transactions that provide the firm with cash flows that offset its losses from price changes.
• C)For many firms,changes in the market prices of the raw materials they use and the goods they produce may be the most important source of risk to their profitability.
• D)Because an increase in the price of the commodity raises the firm's costs and the supplier's revenues,these firms can offset their risks by merging.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and possibly the right to vote on corporate matters.

Daily Management

The ongoing coordination and oversight of a business or organization's operations and activities on a day-to-day basis to ensure efficiency and effectiveness.

State Statutes

Laws established by legislative bodies at the state level in the United States, governing various aspects of daily life and business operations.

Directors

Individuals appointed or elected to oversee the management of a company and make key decisions.