In Terms of Direct Costs,are Futures or Options Likely to Be

question 17

Essay

In terms of direct costs,are futures or options likely to be a more expensive form of hedging? Why? In terms of opportunity costs,which is more expensive? Why?

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Definitions:

Income Tax Expense

The cost incurred by businesses or individuals due to earnings, represented as an expense in financial statements and affecting net income.

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company for reinvestment.

Total Assets

The sum of all resources owned by a company, valued in monetary terms.