In Which of the Following Situations Is a Gain or Loss

question 30

Multiple Choice

In which of the following situations is a gain or loss recorded on a commitment assets or liability which would not otherwise be recorded?

• A) A speculative forward contract.
• B) A fair value hedge of a firm commitment.
• C) A fair value hedge of a recognized monetary item.
• D)A cash flow hedge of a forecasted transaction.

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Definitions:

Fraud in the Inducement

A legal term referring to a deceptive act used to convince someone to enter into a contract, which significantly impacts the victim's decision to agree.

False Representation

The act of providing untrue, misleading, or deceptive information with the intent to defraud others.

Material Fact

A fact that is significant or essential to the issue or matter at hand, which could influence a decision.

Duress

Unlawful pressure or coercion used on a person to compel them to perform an act against their will or judgment.