By Hedging Financial Risk,a Firm Can

question 60

Multiple Choice

By hedging financial risk,a firm can:

• A)ensure a steady rate of return for its shareholders.
• B)eliminate price changes over the long-term.
• C)ensure its own economic viability.
• D)gain time to adapt to changing market conditions.
• E)eliminate its exposure to price increases in raw materials.

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Definitions:

Freud's Theory

A comprehensive theory of human psychology developed by Sigmund Freud, emphasizing unconscious processes and the importance of childhood experiences.

Defense Mechanism

Psychological strategies brought into play by individuals to cope with reality and to maintain self-image.

Alfred Adler

Alfred Adler was an Austrian medical doctor and psychotherapist who founded the school of individual psychology and emphasized the importance of feelings of inferiority and the creative self.

Compensation

The act of providing something, often monetary, to make up for a loss, injury, or suffering.