The main advantages of hedging are (i) Limiting losses (ii) Increases...

Home / Commerce / Business Finance / Question

Examveda

The main advantages of hedging are
(i) Limiting losses
(ii) Increases liquidity
(iii) Lowers margin outlay
(iv) Exchange rate fluctuations
(v) Application of different tax rates
(vi) Covering political risk in foreign investments

A. (i), (ii), (iv) and (v)

B. (i), (ii), (iii) and (iv)

C. (ii), (iii), (iv) and (v)

D. (i), (ii), (iii), (iv), (v) and (vi)

Answer: Option D

This Question Belongs to Commerce >> Business Finance

Related Questions on Business Finance

A. Operating ratio

B. Sales turnover ratio

C. Current ratio

D. Acid test ratio

View Answer

A. Net present value method

B. Internal rate of return method

C. Profitablity index method

D. None of the above

View Answer

List-I	List-II
a. Modigliani Miller approach	1. Commercial papers
b. Net operating income approach	2. Working capital management
c. Short-term money market instrument	3. Capital structure
d. Factoring	4. Arbitrage

A. a-4, b-3, c-1, d-2

B. a-3, b-4, c-1, d-2

C. a-2, b-3, c-1, d-4

D. a-3, b-2, c-4, d-1

View Answer

A. All financing by retained earnings only

B. No change in the key variables such as EPS and DPS

C. The firm has finite life

D. All earnings are either distributed as dividends or invested internally immediately

View Answer