Off-Balance-Sheet Hedging Involves Taking a Position in FX Forward or Other

question 31

True/False

Off-balance-sheet hedging involves taking a position in FX forward or other derivative securities even though no FX assets or liabilities are on the balance sheet.

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Definitions:

Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services over a period of time.

Ending Inventory

The total value of all goods available for sale at the end of an accounting period.

Purchases

The total amount spent on goods and services bought by a business for either resale or use in its operation.

Cost-to-retail Ratio

The cost-to-retail ratio is a method used in inventory accounting to estimate the value of ending inventory using the ratio of cost to retail price.