What Is the Primary Difference Between a Cash Flow Hedge

question 18

Multiple Choice

What is the primary difference between a cash flow hedge and a fair value hedge?

• A) The fair value hedge must completely offset the variability in the cash flow from the foreign currency receivable or payable.
• B) The cash flow hedge can only be used to offset potential foreign currency losses on accounts receivable.
• C) The cash flow hedge must completely offset the variability in cash flow from the foreign currency receivable or payable.
• D) The fair value hedge can only be used to offset the variability in cash flow from long-term fixed assets related to foreign currency fluctuations.

Understand how to calculate various financial ratios, such as debt-to-equity, equity ratio, debt ratio, and times interest earned.

Ability to compute turnover ratios, including accounts receivable turnover, inventory turnover, and days' sales in inventory.

Learn how to compute liquidity ratios, specifically the current ratio and acid-test (quick) ratio.

Interpret and calculate performance measures such as profit margin and return on total assets.

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Definitions:

Information Security Controls

Measures implemented to safeguard information by ensuring its confidentiality, integrity, and availability.

Identity Theft

The fraudulent acquisition and use of a person's private identifying information, usually for financial gain.

Financial Information

Data concerning the financial health, performance, and transactions of an individual, business, or other entity, often used for analysis and decision-making.

Unauthorized Access

The gain of entry into a computer system or network without permission.