Which of the Following Is Cited as a Good Reason

question 38

Multiple Choice

Which of the following is cited as a good reason for NOT hedging currency exposures?

• A) Shareholders are more capable of diversifying risk than management.
• B) Currency risk management through hedging does not increase expected cash flows.
• C) Hedging activities are often of greater benefit to management than to shareholders.
• D) All of the above are cited as reasons NOT to hedge.

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Definitions:

Chancellor

A senior official in many educational institutions or a high-ranking government official in certain countries.

Juror

An individual selected to serve on a jury, tasked with reviewing evidence and rendering a verdict in a trial.

Appellee

The party in a legal dispute who won at the previous trial level and is responding to the appeal filed by the losing party.

Appeal

The process of challenging a court's decision in a higher court, seeking a review and potential reversal or modification of the lower court's ruling.