Which of the Following Statements Is True Concerning Forward Contracts

question 40

Multiple Choice

Which of the following statements is true concerning forward contracts classified as hedges of an identifiable foreign currency commitment?

• A) Forward contracts used as hedges cannot exceed the foreign currency commitment.
• B) Forward contracts cannot extend for a time period after the transaction date of the commitment.
• C) The gain or loss traceable to the time period after the transaction date of the commitment should not be deferred.
• D) None of these statements is true.

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Definitions:

Authority-And-Responsibility

Concerns the distribution of tasks and the accompanying expectation of accountabilities within an organization, ensuring that individuals have the rights and obligations to execute their roles.

Scalar Principle

An organizational principle that outlines a clear and direct line of authority in the hierarchy from the top of the organization to the lowest level.

Boundaryless Organizations

Organizations that are not defined by, or limited to, traditional hierarchical structures or physical boundaries, enabling more fluid and flexible approaches to business operations.

Network Structures

Organizational designs that involve multiple nodes or entities interconnected to facilitate information flow and collaborative operations.