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:

NADH

Nicotinamide adenine dinucleotide (reduced form) is a coenzyme found in all living cells, involved in redox reactions, carrying electrons from one reaction to another.

Ketone Bodies

Compounds, including acetone, acetoacetic acid, and beta-hydroxybutyric acid, that are produced as by-products when fatty acids are broken down for energy in the liver and kidney.

Urine

A liquid by-product of metabolism in humans and many animals, excreted by the kidneys and stored in the bladder until elimination.

Fatty Acids

Long chains of hydrocarbon molecules that are important components of lipids in the body, serving as a major source of energy and playing roles in cell membrane structure.