Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A)Firms generally do not possess better information than outside investors regarding the risk of future commodity price changes, nor can they influence that risk through their actions.
• B)The firm may speculate by entering into contracts that do not offset its actual risks.
• C)Cash flows are exchanged on a monthly basis, rather than waiting until the end of the contract, through a procedure called 'marking to market'.
• D)When a firm authorises managers to trade contracts to hedge, it opens the door to the possibility of speculation.

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Definitions:

Comprehensive Income

The total change in equity for a reporting period other than transactions from owners.

Equity Method

A method of accounting where an investor recognizes its proportionate share of the associate or joint venture's income, losses, and dividends within its own financial statements.

Ownership Percentage

The fraction of an investment or business enterprise owned by an individual or entity, usually expressed as a percentage.

Bud Ltd.

is not a universally recognized key term; it might refer to a specific entity or business and its significance might vary by context. NO.