Which of the Following Is the Best Reason for Management

question 10

Multiple Choice

Which of the following is the best reason for management to emphasize fraud prevention and deterrence?

• A) collusion and false documentation make fraud detection difficult to detect
• B) collusion is impossible to detect
• C) false Documentation is impossible to detect
• D) all of the above are equally valid reasons

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Definitions:

Hedge Ratios

A mathematical approach to minimizing risk by determining the optimal proportion of positions needed to offset potential losses.

Long Puts

An option strategy involving the purchase of put options, with the expectation that the underlying asset will decrease in value, allowing the holder to sell at a higher strike price.

Riskless Arbitrage

The process of buying and selling in different markets to take advantage of differing prices for the same asset with no risk.

Standard Deviation

A statistical measure of the dispersion of a set of data from its mean, used to gauge the amount of variation or dispersion of a set of values.