Some reasons to manage risk by hedging are which of the following?
I. Ability to have needed cash flows.
II. Reduce the chance of financial loss
A) I only
B) II only
C) Both I and II
D) Neither I nor II

Question

Quizplus · Accepted Answer

Hedging helps in managing risk and allows an organization to be prepared for unforeseen events. By hedging, an organization can ensure that they have the needed cash flows to meet their financial obligations and reduce the chance of financial loss. Hence, both I and II are valid reasons for managing risk by hedging.

Some Reasons to Manage Risk by Hedging Are Which of the Following