Question: An entity determined that its variable interest rate on borrowing will increase significantly in the near future. Consequently, the entity hedged its variable rate by

An entity determined that its variable interest rate on borrowing will increase significantly in the near future. Consequently, the entity hedged its variable rate by locking in a fixed rate for the relevant period. According to COSO, this decision is which type of response to risk?

Sharing.

Reduction.

Acceptance.

Avoidance.

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