Because Creditors May Prefer That Firms Maintain Low Exposure to Exchange

question 3

True/False

Because creditors may prefer that firms maintain low exposure to exchange rate risk, exchange rate movements may cause earnings to be more volatile, and because investors may prefer corporations to perform hedging for them, exchange rate risk is probably relevant.

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Definitions:

Conclusion

The statement in logic that follows from the premises by means of the rules of logical inference.

Class

A group of objects or concepts with shared characteristics, often used in categorization.

Analogy

A comparison between two objects or concepts for the purpose of explanation or clarification, often suggesting that if they are alike in some respects, they are probably alike in others too.

Conclusion

The final part of something, typically a judgment or decision that has been reached by reasoning.