Which of the Following Is Not a Reason for Firms

question 37

Multiple Choice

Which of the following is not a reason for firms to hedge?

• A)Firms can hedge less expensively than can their shareholders
• B)Shareholders cannot tolerate mark-to-market losses
• C)Hedging by corporations can have tax advantages
• D)Shareholders are not always aware of their firms' risks
• E)none of the above

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Definitions:

Prescription

An authoritative recommendation or directive, often related to medical treatment or legal matters.

Resocialization

The profound change or complete transformation of a person’s personality as a result of being placed in a situation or an environment dedicated to changing his or her previous identity.

Erving Goffman

A Canadian-born sociologist and writer, known for his analysis of human interaction in everyday life and his development of dramaturgical analysis.

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