Which of the Following Is Not an Example of a Fair

question 20

Multiple Choice

Which of the following is not an example of a fair value hedge?

• A) a forward contract to buy US$ hedging a recognised trade payable in US$.
• B) a forward contract to sell US$ hedging a recognised loan receivable in US$.
• C) a forward contract to sell US$ hedging a recognised trade receivable in US$.
• D) a forward contract to buy US$ hedging a highly probable purchase of inventory in US$.

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Definitions:

Self-Assured

Exhibiting confidence in one's own abilities or character, without displaying arrogance or overconfidence.

Mature

The state of being fully developed in physical, emotional, or mental capacities, often characterized by a responsible and thoughtful approach to life.

Moral Reasoning

The process of determining right from wrong in a given situation by applying ethical principles and moral values.

Kohlberg

Refers to Lawrence Kohlberg, an American psychologist best known for his theory of stages of moral development.