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Which of the following statements is incorrect with respect to hedging/risk management?
Group of answer choices
(a) Due to the cost of hedging, it is better for the company to hedge the net exposure to currency risk rather than hedging each individual exposure to currency risk within the company separately.
(b) Firms may use an array of side deals to manage risk such as insurance, swaps/options, futures/forward contracts, or natural hedges.
(c) With risk management activities, the firm may be able to monitor the manager's performance better as they potentially reduce the impact of luck on firm performance.
(d) When faced with a linear tax function, hedging can help to reduce the overall tax paid by a company.
(e) Hedging can decrease the likelihood that firms will have to access costly external capital markets.
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