Which of a) through d) is UNLIKELY to result in a decision to hedge currency risk?
A) bid-ask spreads on foreign exchange
B) costs of financial distress
C) differential taxes on income from different tax jurisdictions
D) stakeholder game-playing
E) All of the above are incentives to hedge

Question

Quizplus · Accepted Answer

Bid-ask spreads on foreign exchange are typically not a primary reason to hedge currency risk, as they are more related to transaction costs rather than risk management.

Which of A) Through D) Is UNLIKELY to Result in a Decision