A reduction in the risk or exposure a firm has to volatility is called a:
AHedge
BHurdle
CHolder
DHeader
Answer & Solution
Correct answer: A. Hedge
1. The firm wants less uncertainty, not more.
2. Any step that cuts exposure counts.
3. That step is a hedge.
_Source: OpenStax Principles of Finance, Chapter 20, Risk Management and the Financial Manager._
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