Which One of the Following Is Not a Risk Associated

question 76

Multiple Choice

Which one of the following is not a risk associated with cash?

• A)Susceptibility to error because of the large volume of transactions.
• B)Susceptibility to fraud by misstatement.
• C)Susceptibility to poorly developed automated systems with strong audit trail requirements.
• D)Susceptibility to fraud by theft.

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Definitions:

Perfect Hedge

A perfect hedge is an investment position that completely eliminates the risk of another investment through a counterbalancing act, typically through derivatives like options or futures contracts.

Hedger

An individual or entity that enters into contracts such as futures or options to offset the risk of price movements in the commodities or securities markets.

Prices Change

The fluctuation in the market price of goods, services, or securities over time due to various economic factors.

Put Option

A put option is a financial contract giving the holder the right, but not the obligation, to sell a specific amount of an asset at a predetermined price within a specific time frame.