A Forward Contract May Be Used for Which of the Following

question 34

Multiple Choice

A forward contract may be used for which of the following?
1) A fair value hedge of an asset.
2) A cash flow hedge of an asset.
3) A fair value hedge of a liability.
4) A cash flow hedge of a liability.

• A) 1 and 3
• B) 2 and 4
• C) 1 and 2
• D) 1, 3, and 4
• E) 1, 2, 3, and 4

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Definitions:

Electromagnetic Radiation

Energy that travels through space in the form of waves, including radio waves, microwaves, infrared, visible light, ultraviolet, X-rays, and gamma rays.

Vibrational Motions

The movement of atoms within a molecule that involves the stretching and bending of chemical bonds.

Absorption

The process by which one substance, such as a solid or liquid, takes up another substance, such as a gas or liquid, through atomic or molecular interactions.

Nonlinear Molecule

A molecule that does not have a straight-line or linear shape, often having a bent or three-dimensional structure.