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Consider the following statements: Statement 1: The risk tolerance discussion is about the defining actions that management should take to minimize losses. Statement 2: Limiting

Consider the following statements:

Statement 1: The risk tolerance discussion is about the defining actions that management should take to minimize losses.

Statement 2: Limiting the amount of money that can be spent on hedging strategies is a part of risk budgeting. Which of the following is most likely?

a) Only Statement 1 is correct.

b) Only Statement 2 is correct.

c) Both statements are incorrect.

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