A Fair Value Hedge Differs from a Cash Flow Hedge

question 31

Multiple Choice

A fair value hedge differs from a cash flow hedge because a fair value hedge

• A)cannot be used for firm purchase or sales commitments.
• B)is not recorded unless it is a highly-effective hedge.
• C)records gains or losses in the value of the derivative directly to earnings of the company.
• D)defers the gains or losses in the value of the derivative using Other Comprehensive Income.

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Definitions:

Self-Consciousness

An acute awareness of oneself, one's appearance, or one's actions, often leading to feelings of vulnerability about how one is perceived by others.

Self-Concept

An individual's perception of themselves, encompassing beliefs, feelings, and thoughts about one's own abilities, appearance, and personality.

Individual's Sense

The unique perception and understanding an individual has of themselves, their environment, and their experiences.

Self-Esteem

an individual's sense of self-worth or the value they place on themselves, affecting their confidence and behavior.