The costs of hedging through operations are likely to be less burdensome for a large multinational corporation with diversified operations than for a small, less-diversified firm.

Question

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A large multinational corporation with diversified operations has a greater ability to absorb the costs of hedging through operations due to its size and diversified revenue streams. In contrast, a small, less-diversified firm may have limited resources and less flexibility to implement effective hedging strategies.

The Costs of Hedging Through Operations Are Likely to Be