Which of the following statements is false?
A) Firms generally do not possess better information than outside investors regarding the risk of future commodity price changes, nor can they influence that risk through their actions.
B) Cash flows are exchanged on a monthly basis, rather than waiting until the end of the contract, through a procedure called marking to market.
C) The firm may speculate by entering into contracts that do not offset its actual risks.
D) When a firm authorizes managers to trade contracts to hedge, it opens the door to the possibility of speculation.

Question

Quizplus · Accepted Answer

B) Cash flows are exchanged on a daily basis, rather than waiting until the end of the contract, through a procedure called marking to market.

Which of the Following Statements Is False