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:

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The authority granted to courts and judges to interpret and apply the law, make judgments, and carry out justice.

Administrative Law Judge's Decision

A ruling issued by an administrative law judge, which resolves disputes involving government agencies and the application of administrative laws.

Court

A tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and render judgments.

Substantive

Pertains to the essential elements or specific substance of a matter, often used to describe laws or regulations that govern actual rights and duties.