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1 year ago

hedging, or reducing risk, is the same as adding value or return to the firm. group of answer choices true false

Business

1 answer:

pychu [463]1 year ago

4 0

false Hedging, or lowering risk, is the same as increasing the firm's value or return.

<h3>How might currency risk be reduced through hedging?</h3>

hedging to reduce the risk of currency loss. Foreign exchange risk is an unavoidable reality for businesses doing business in other countries, although hedging can help reduce the risk. By taking a contrary position in a comparable asset, the hedging technique seeks to reduce risks associated with financial assets.

<h3>What does hedge mean?</h3>

A approach for reducing the risks associated with financial assets is hedging. It uses market tactics or financial instruments to reduce the risk of any unfavorable price changes. To put it another way, investors use a trade in another investment to protect one investment.

To know more about hedging, or reducing risk, visit:-

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3. Management activities include all of the following except:

7nadin3 [17]

Answer:

Explanation:

Management activities include Decision making

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3 years ago

The Martinez Legal Firm (MLF) recently acquired a smaller competitor, Miller and Associates, which specializes in issues not pre

Vsevolod [243]

Answer:

increase

Explanation:

Transaction cost is the cost needed for every exchange. This cost can be external or internal. External transaction cost comes from the cost to do an exchange with a second party while internal cost comes from the company itself.

The Martinez Legal Firm acquired a competitor so their business size will increase for sure. Larger businesses will become more complex and need more management. These will, in turn, increase the internal transaction cost.

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3 years ago

Autoliv produces air bag systems that it sells to automobile manufacturers throughout the world. Assume the company has a capaci

gogolik [260]

Answer: See explanation

Explanation:

a. The variable cost per unit will be:

= (3,825,000 - 3,680,000) / (45million - 40 million)

= 0.029

Then, the financial order of accepting the order will be:

Contribution margin = Unit selling price - Unit

= 65 - 29

= 36

Since the size of the order is 100,000, the financial impact of accepting the order will be:

= 36 × 100,000

= 3,600,000

b. The differential analysis will be:

Contribution from special order = 3,600,000

Opportunity cost {100,000 = 120,000,000 - 29,000,000 = 9,100,000

Net disadvantage of accepting order will then be:

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3 years ago

Stadford Inc. is financed with 40 percent debt and 60 percent equity. This mixture of debt and equity is referred to as the firm

lesya692 [45]

Answer: Capital structure

Explanation: In simple words, capital structure refers to the proportion of different securities that an organisation uses as a combination to fund its operations. In other words, the amount of debt and equity in total capital in hand of the business is termed as capital structure.

Capital structure is of high importance to the investors as it directly impacts the liquidity and profitability of the organisation.

The ability of a company to bear its short term obligation is called liquidity and the ability to generate profit with given amount of resources is called profitability.

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3 years ago

Darrin’s employees are highly skilled, so he allows them free rein to do their jobs.

Oxana [17]

Answer::Leader-Member exchange , Out group members

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The created relationship can either succeed when there is trust and mutual respect leading to effective employees or fail by producing undesired result in terms of a hostile relationship leading to low efficiency and productivity from employees

According to the leader member exchange theory, leaders tend to create different relationships with followers by forming two groups----- in group members and out group members

of which the outgroup members are given less responsibilities with less attention and work outside the leaders inner circle of communication and therefore are less likely to engage in organizational citizenship than other employees.

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4 years ago