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Firms deal with different types of risk in their day-to-day operations and adopt risk management strategies. It is important to understand why firms manage risk.

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Firms deal with different types of risk in their day-to-day operations and adopt risk management strategies. It is important to understand why firms manage risk. Atlanta Aeronautics Company has attempted to reduce the volatility of cash flows to decrease the probability of bankruptcy. Of the following reasons to manage risk, which is it most likely concerned with? Compensation systems Improving its debt capacity Comparative advantage in hedging If a firm began using risk management techniques to stabilize its annual operating cash flows, the debt capacity of the firm would

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