Which of the Following Is a Reason Why Most Firms

question 3

Multiple Choice

Which of the following is a reason why most firms do not hedge economic risk?

• A)Among the translation risk,transaction risk and economic risk; economic risk has the least influence on the total currency risk of a firm.
• B)It is costly to hedge against the economic risk and also highly ineffective.
• C)Whenever exchange rates change for real reasons other than purely monetary reasons,it is difficult to implement effective hedges.
• D)It is difficult to estimate both the current and the long-term effects of exchange rate changes on the firm's cash flows.

Analyze the impact of adjusting entries on the balance of prepaid accounts prior to adjustment.

Calculate the adjusted balances for accounts affected by the entries.

Understand the concept of book value and its calculation.

Recognize the accounting treatment of unearned revenues and its adjustment.

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Definitions:

Thoracic Vertebrae

The twelve vertebrae situated between the cervical vertebrae and the lumbar vertebrae in the vertebral column, forming the middle segment of the backbone and providing attachment for the ribs.

Coccyx

The Coccyx, commonly referred to as the tailbone, is the small bone at the bottom of the vertebral column in humans, comprised of three to five vertebrae.

Fuse

To combine or blend to form a single entity, often by melting together under heat.

Sacrum And Coccyx

The sacrum is a large, triangular bone at the base of the spine, above the coccyx or tailbone, which is a small, triangular bone at the very bottom of the spinal column.