Which One of the Following Statements Is Incorrect? Hedge Accounting

question 478

Multiple Choice

Which one of the following statements is incorrect? Hedge accounting of an existing position no longer applies when:

• A) the trader acquires additional exposure in the hedged item.
• B) the hedging instrument is sold, terminated or exercised.
• C) the hedged item is sold or settled.
• D) a hedge fails the effectiveness test.

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Definitions:

Visual Aid

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Idea Relationship

The connection between concepts or the way in which ideas are linked together.

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