A Balance Sheet Hedge Seeks to

question 45

Multiple Choice

A balance sheet hedge seeks to

• A)eliminate any mismatch of net assets and net liabilities denominated in the same currency.
• B)transfer accounting exposure to transaction exposure.
• C)create cumulative translation adjustment.
• D)none of the options

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Definitions:

Sublimation

A defense mechanism where socially unacceptable impulses or idealizations are transformed into socially acceptable actions or behavior, often resulting in a long-term conversion of the initial impulse.

Defense Mechanism

Psychological strategies brought into play by individuals, unconsciously, to protect themselves from anxiety and to cope with reality.

Unacceptable Impulse

A desire or thought that is not permitted by personal values or social standards, often repressed or denied.

Superego

In Freudian psychoanalysis, the part of the personality that acts as the ethical component, providing moral standards by which the ego operates.