Which one of the following is not generally considered a benefit of hedging?
A) Hedging reduces business risk.
B) Hedging allows prices to be locked in ahead of time.
C) Hedging can be very profitable.
D) Hedging can stabilize profits.

Question

Quizplus · Accepted Answer

While hedging can generate profits, it is not generally considered a benefit as the primary intention of hedging is to reduce risk and stabilize profits. Profit generation is a secondary benefit that may or may not occur as a result of hedging.

Which One of the Following Is Not Generally Considered a Benefit