Procter & Gamble's Balance Sheet Suggests That Which of the Following

question 14

Multiple Choice

Procter & Gamble's balance sheet suggests that which of the following is NOT a characteristic of the company's risk exposure or risk management practice?

• A) P&G manufactures and sells its products in many countries.It mainly uses forwards and options to reduce the risk that the company's financial position will be adversely affected by short-term changes in exchange rates.
• B) P&G uses futures,options,and swaps to manage price volatility of raw materials.
• C) P&G designates a security as a hedge of a specific underlying exposure and monitors its effectiveness in an ongoing manner.
• D) P&G is exposed to significant volatility from commodity hedging activity and credit risk exposure.
• E) P&G grants stock options and restricted stock awards to key managers and directors.

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Definitions:

Reflection of Feelings

The practice of expressing back the emotions a speaker appears to be conveying, allowing them to explore these emotions further.

Company

A company is a legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Budget Cutbacks

Reductions in the planned spending of a government, organization, or individual, usually to align expenses with available resources or revenues.

Angry

Feeling or showing strong annoyance, displeasure, or hostility.