Which of the following statements is true regarding corporate risk management?

		None of the other answer choices are correct
		Hedging enhances the effectiveness of performance-based compensation by increasing the amount of risks that are out of mangers control
		Hedging reduces the probability of bankruptcy and increases the cost of debt
		By increasing the firms borrowing capacity, hedging can reduce the probability that the firm lacks the financing needed to take on positive NPV projects.
		Hedging increases a firms expected tax liability and reduces expected net income