All of the Following Are Examples of Cash Flow Hedges

question 7

Multiple Choice

All of the following are examples of cash flow hedges except:

• A)​a hedge against a price increase in a raw material expected to be purchased in 60 days.
• B)​a hedge against a fixed interest note payable using an interest rate swap.
• C)​a hedge against a variable interest note payable using an interest rate swap.
• D)​All of the above are examples of cash flow hedges.

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Definitions:

Utility Functions

Mathematical models used to represent an individual's preference ordering over a set of alternatives, based on the level of satisfaction or utility.

Fair Allocations

Distributions of resources or goods among individuals in a way that is considered equitable or just, often taking individual needs or contributions into account.

Apples

Edible fruits produced by an apple tree, known for their sweet taste and crisp texture, often consumed fresh or used in various culinary dishes.

Oranges

Typically refers to the citrus fruit known for its sweet flavor, but in economic or business models, it could symbolize commodity goods.