If a Firm Is Hedging Payables with Futures Contracts, It

question 46

True/False

If a firm is hedging payables with futures contracts, it may end up paying more for the payable than it would have had it remained unhedged if the foreign currency depreciates.

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Definitions:

Personnel Manager

A professional responsible for overseeing the recruitment, training, and welfare of employees.

Management Trainee

A management trainee is an individual in an entry-level position, undergoing training and performing tasks under supervision to learn the skills necessary for management positions.

Confidential Information

Sensitive data that is meant to be kept secret from unauthorized parties, including trade secrets, business strategies, and personal information.

Gratuitous Agents

Those who act on behalf of another without receiving any compensation for their services.