Which One of the Following Statements Is Correct in Relation

Multiple Choice

Which one of the following statements is correct in relation to a firm's short-run financial risk?

A) Short-run financial risk results from permanent changes in prices due to new technology.
B) A financially sound firm can become financially distressed as the result of its short-run exposure to financial risk.
C) Each segment of a business entity should be responsible for hedging its own short-run financial risk.
D) Short-run financial risk is defined as changes resulting from fundamental shifts in the underlying economics of a business.
E) Thus far, hedging techniques have been unsuccessful in reducing short-run financial risk.