Financial Risk Manager Part 1

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The newly hired CFO of a publicly traded computer manufacturing company is assessing the concerns and motivations of different stakeholder groups. The CFO focuses on the perspectives of these stakeholders on the firm's hedging strategies. Which of the following statements is correct?

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If the firm's equity investors hold a well-diversified portfolio, they would typically prefer that the firm hedge risks specific to the computer industry.

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Debt investors would typically prefer that the company use hedging strategies to increase the stability of its revenue stream.

Both equity and debt investors would typically prefer that the firm not hedge the foreign exchange risk of long-term contracts with international customers.

Equity investors would typically not reward the firm for using hedging to reduce its tax exposure over a multi-year period.