[Solved] Assuming No Transaction Costs (I

Question 9
Multiple Choice

Assuming no transaction costs (i.e., hedging is "free"), hedging currency exposures should ________ the variability of expected cash flows to a firm and at the same time, the expected value of the cash flows should ________.

A) increase; not change
B) decrease; not change
C) not change; increase
D) not change; not change

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