A Type of Financial Derivative That Would Allow a Firm

question 28

Multiple Choice

A type of financial derivative that would allow a firm to hedge against changes in interest rates over a 5-year period is a ____.

• A)interest rate futures contract
• B)commodity soup
• C)interest rate swap
• D)interest rate put option

Understand the classification of investments and the criteria for using the equity method.

Recognize how dividends and net income or loss from investees are handled under the equity method.

Distinguish between the cost method, equity method, and fair value models for accounting investments.

Identify the implications of significant influence and control in relation to investment accounting.

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Definitions:

Group Members

Individuals who are part of a collective or team, sharing common goals, tasks, or interests within the group.

Rational-emotive Behavior Therapy

A form of psychotherapy that identifies irrational beliefs, challenges these beliefs, and encourages the adoption of more rational and realistic thinking.

Cognitive Therapy

A type of psychological therapy that involves identifying and challenging negative thought patterns to alter unwanted behavior patterns or treat mood disorders.

Pathological Behavior

Actions or behaviors that are extreme or abnormal, often indicating the presence of a psychological disorder or disease.