What Is the Objective of a Fair Value Hedge

question 15

Multiple Choice

What is the objective of a fair value hedge?

• A)To offset the losses due to changes in the value of an asset or liability
• B)To reduce the risk associated with future cash flows
• C)To predict future cash flows
• D)To predict the value of an asset or minimize the value of a liability
• E)None of the options are correct

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Definitions:

DSM-IV TR

The Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, Text Revision; a manual published by the American Psychiatric Association detailing diagnostic criteria for mental disorders, replaced by DSM-5 in 2013.

Communication Deficits

Impairments in the ability to express oneself effectively or to understand the communication of others.

Cognitive Skills

Mental abilities involved in processing information, understanding concepts, solving problems, and making decisions.

Attention-Deficit/Hyperactivity Disorder

A neurodevelopmental disorder characterized by a persistent pattern of inattention and/or hyperactivity-impulsivity that interferes with functioning or development.