Which of the Following Statements Related to a Corporation Hedging

question 12

Multiple Choice

Which of the following statements related to a corporation hedging in the real world is INCORRECT?

• A) Corporations should not hedge because a shareholder can always replicate such policies themselves trading related securities.
• B) In case a decision is made to hedge,corporations can do it at lower transaction costs than shareholders can.
• C) A company hedge is often better than a shareholder's hedge because companies can dedicate competent personnel to hedging.
• D) A company can hedge by issuing a whole range of securities that individuals cannot create on their own.
• E) A company can hedge for strategic reasons that may lie beyond an ordinary shareholder's knowledge.