How Should Discounts or Premiums on Forward Contracts Be Treated

question 39

Multiple Choice

How should discounts or premiums on forward contracts be treated if the derivative is hedging a foreign-currency-denominated asset?

• A) Carried on the balance sheet until the contract is completed
• B) Included in income in the period the derivative is acquired
• C) Amortized over the life of the forward contract
• D) None of the above

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Definitions:

Jungian Analysis

A therapeutic approach based on the theories of Carl Jung, focusing on the integration of the conscious and unconscious parts of the mind.

Formal Training

The process of acquiring skills, knowledge, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies.

Principal of Equivalence

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