Which of the Following Statements Is True Concerning Hedge Accounting

question 23

Multiple Choice

Which of the following statements is true concerning hedge accounting?

• A) Hedges of foreign currency firm commitments are used for future sales only.
• B) Hedges of foreign currency firm commitments are used for future purchases only.
• C) Hedges of foreign currency firm commitments are used for current sales or purchases.
• D) Hedges of foreign currency firm commitments are used for future sales or purchases.
• E) Hedges of foreign currency firm commitments are speculative in nature.

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Definitions:

Absolute Threshold

The smallest level of stimulus that can be detected by a sense, such as the lightest touch or faintest sound perceivable.

Hearing

The physiological process by which sound waves are translated into electrical signals that the brain interprets as sound.

Decibels

A unit of measurement for the intensity of sound, representing the ratio between two quantities and often used to describe noise levels.

Air Pressure Waves

Variations in the pressure of air that are primarily responsible for the propagation of sound.