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Figure 18.3
Using the figure above, identify the labeled structure(s) in each of the following questions.
-Identify the structure(s) indicated by Label T.
Interest-Bearing Note
A debt instrument that obliges the issuer to pay interest to the holder on the principal amount until maturity.
Forward Contracts
Financial derivatives that obligate the buyer to purchase, and the seller to sell, a particular asset at a predetermined future date and price.
Fair Value Hedge
A hedge of the exposure to changes in fair value of an asset or liability, or an unidentified firm commitment, that is attributable to a particular risk.
Cash Flow Hedge
A type of hedge that protects against the variability in cash flows arising from a particular risk, such as interest rate movements or currency fluctuations.
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