For Which Type of Derivative Are Changes in the Fair

question 45

Multiple Choice

For which type of derivative are changes in the fair value deferred and recognized as an equity adjustment?

• A) Fair value hedge
• B) Cash flow hedge
• C) Operating hedge
• D) Notional value hedge

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations, calculated by dividing current assets by current liabilities.

Asset Turnover Ratio

A financial metric that measures how efficiently a company uses its assets to generate sales revenue.

Receivables Turnover Ratio

A financial ratio indicating how efficiently a company collects on its accounts receivable, calculated as net credit sales divided by average accounts receivable.

Gross Accounts Receivable

The total amount of money owed to a company by its customers for goods or services delivered but not yet paid for, before any deductions for returns or bad debts.