When a firm can pass on its cost increases to its customers and revenue decreases to its suppliers,it has a ________ hedge.
A)natural
B)basis
C)vertical
D)horizontal
E)hidden

Question

Quizplus · Accepted Answer

A natural hedge occurs when a firm can mitigate its financial risks, such as those from cost increases or revenue decreases, through its normal operating procedures, such as passing on costs to customers or adjusting payments to suppliers, without entering into financial derivatives or contracts.

When a Firm Can Pass on Its Cost Increases to Its