A Firm Enters into a One-Year Forward Contract to Buy

question 17

Multiple Choice

A firm enters into a one-year forward contract to buy refined oil. To hedge itself, the firm simultaneously sells one-year futures contracts on crude oil. In which of the following scenarios might the firm come under cash flows pressure related to these contracts?

• A) Oil prices plummet a day before the maturity of the contracts
• B) Oil prices skyrocket a day before the maturity of the contracts
• C) Oil prices plummet a day after the firm enters the contracts
• D) Oil prices skyrocket a day after the firm enters the contracts

Understand different conflict management strategies and techniques, including integrative negotiation and distributive bargaining.

Recognize the importance and application of functional and dysfunctional conflict in organizational settings.

Comprehend the role of emotions and power dynamics in conflict management and resolution.

Identify various conflict management styles, such as competing, avoiding, accommodating, compromising, and collaborating, and their applicability in specific situations.

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Definitions:

Corporate Treasurer

A senior executive responsible for managing the investment and financing activities of a corporation, including liquidity management and financial risk.

Tax Management

Strategic planning aimed at minimizing liability and optimizing efficiency in tax obligations.

Credit Management

The process of granting credit, setting the terms it's granted on, and recovering this credit when it's due.

Cost Accounting

The process of recording, classifying, analyzing, and allocating all costs associated with a business operation.