With Respect to Derivative Instruments That Are Designated as Hedges

question 18

Multiple Choice

With respect to derivative instruments that are designated as hedges, the FASB calls for which of the following general disclosures?

• A)The objective of using hedging instruments.
• B)Description of the various types of hedges.
• C)A description of the types of transactions that are hedged
• D)All of the above.

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Definitions:

Cost-output Elasticity

Cost-output elasticity measures the responsiveness of the cost of producing a good to a change in the output level, indicating how costs change as production scales.

Marginal Cost

The increase in expenditure resulting from the production of an additional unit of a good or service.

Short-run Cost Function

The relationship between the cost of production and the level of output when at least one input is fixed in the short term.

Long-run Cost Function

A relationship that shows the lowest possible cost at which a firm can produce any given level of output when all inputs, including capital, are variable.