In the Accounting for Forward Exchange Contracts, Gains and Losses

question 52

Multiple Choice

In the accounting for forward exchange contracts, gains and losses are measured using either spot or forward rates. Which of the following statements concerning measurement of gains and losses is true?

• A) The gains or losses in a hedge on an exposed asset will use the spot rate for the asset and the forward rate for the forward contract.
• B) The gains or losses in a speculative hedge will use the forward rate throughout the contract.
• C) The gains or losses in a hedge on an identifiable commitment will use the spot rate for the commitment and the forward rate for the forward contract.
• D) All of these statements are true.

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Definitions:

Behavior

The observable actions or responses of humans or animals in response to external or internal stimuli.

Genes

Units of heredity made up of DNA that act as instructions to make molecules called proteins, influencing the development, functioning, and reproduction of organisms.

Behavior Geneticists

Scientists who study the genetic and environmental influences on human behavior, often through twin and adoption studies.

Selective Breeding Studies

Research activities focused on the intentional breeding of organisms to produce offspring with desirable traits, often used in agriculture and animal husbandry.