What Reason Might Be Given for Not Wanting to Hedge

question 2

Multiple Choice

What reason might be given for not wanting to hedge the future issuance of a liability if interest rates are unusually high?

• A) the margin cost will be expensive
• B) you are locking in a high rate
• C) transaction costs are higher
• D) futures prices are lower
• E) none of the above

---

Definitions:

Social Communication Model

A framework for understanding how communication occurs and is facilitated within social contexts and networks.

Plagiarism

The practice of taking another's work or thoughts and passing them off as one's original creations without giving due credit.

Ethical Lapse

A failure to adhere to ethical standards or conduct.

Low-Context Culture

A culture where communication is explicit, messages are direct, and understanding does not heavily rely on contextual cues.