Hedging involves contracts or transactions that provide the firm with ________ that offset its losses from price changes.
A) profits
B) incomes
C) cash flows
D) net earnings

Question

Quizplus · Accepted Answer

Hedging is a risk management strategy that involves entering into contracts or transactions that provide the firm with cash flows that offset or limit its losses resulting from price changes. Therefore, the best choice is C, "cash flows." Options A, B, and D do not accurately describe the purpose or outcome of hedging.

Hedging Involves Contracts or Transactions That Provide the Firm with ________