One Possible Reason for a Balance Sheet Hedge Could Be

question 2

True/False

One possible reason for a balance sheet hedge could be because the foreign subsidiary is about to be liquidated, so that value of its Cumulative Translation Adjustment (CTA) would be realized.

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Definitions:

Negative Affectivity

A personality characteristic involving the predisposition to experience negative emotions and mood states frequently.

Functionalism

A theoretical framework in social sciences, particularly sociology and anthropology, focusing on the roles and contributions of societal institutions and norms in maintaining and organizing society.

Positive Affectivity

The tendency to experience and display positive emotions and moods, such as happiness, enthusiasm, and joy.

Emotional Competence

The ability to effectively perceive, express, understand, and manage emotions in oneself and others.