A Derivative Instrument That Gives the Holder the Right but Not

question 94

Multiple Choice

A derivative instrument that gives the holder the right but not the obligation to do something is a/an

• A)future contract.
• B)swap contract.
• C)performance contract.
• D)options contract.

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Definitions:

Historical Rate

An exchange rate used to convert foreign currency amounts involved in a transaction to the functional currency at the date the transaction occurred.

Temporal Methods

An accounting technique used to convert the financial statements of a subsidiary into the parent company's presentation currency, applying exchange rates based on the timing of the underlying transactions.

Translating

The process of converting financial data from one currency to another currency in financial reporting.

Accounting Standards

Regulations and guidelines for financial reporting and accounting practices that ensure consistency, transparency, and comparability of financial statements.