Which of the Following Is Not a Disclosure for Derivatives

question 26

Multiple Choice

Which of the following is not a disclosure for derivatives required under SFAS No.133?

• A) Firms must describe their risk management strategy and how particular derivatives
• Help accomplish their hedging objectives.
• B) For fair value and cash flow hedges, firms must disclose the net gain or loss recognized
• In earnings resulting from the hedges' ineffectiveness and the line item on the income statement that includes this net gain or loss.
• C) For cash flow hedges, firms must describe the transactions or events that will result
• In reclassifying gains and losses from other comprehensive income to net income
• And the estimated amount of such reclassifications during the next 12 months.
• D) The specifics of a model that simulates with a 95 percent or other confidence level the minimum, maximum, or average amount of loss that a firm would incur.

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Definitions:

Rating Scale

Assessment in which a numerical value is assigned to specific behavior that is listed in the scale.

Frequency Count

Assessment in which the frequency of a particular behavior is counted.

Projective Test

is a type of psychological assessment that uses ambiguous stimuli to elicit responses that reveal aspects of an individual's personality.

Ambiguous Stimuli

Stimuli that can be understood in more than one way and often require interpretation by the individual.