Question $6($Mandatory$)(5$ points$)$

Based on Bodnar, et al $(1996),$ which of the following statements is NOT correct?

A$)$ It is clear that swaps dominate as a vehicle for interest rate risk management

for the firms.

B$)$ Hedging balance sheet items is more common than hedging firm$-$

commitment transaction exposure.

C$)$ Large firms are more likely to use derivatives than small firms.

D$)$ The majority of end$-$user activity is focused on hedging of the more clearly

definable exposures arising from specific transactions.

E$)$ "Accounting treatment" is ranked highest among all concerns about

derivatives if we add up the percentage of "high concern" and "moderate

concern".