Which of the Following Statements Is True Concerning Forward Contracts

question 30

Multiple Choice

Which of the following statements is true concerning forward contracts classified as hedges of an identifiable foreign currency commitment?

• A)​Forward contracts used as hedges cannot exceed the foreign currency commitment.
• B)​Forward contracts cannot extend for a time period after the transaction date of the commitment.
• C)​The gain or loss traceable to the time period after the transaction date of the commitment are treated as a hedge of a receivable or payable.
• D)​None of these statements is true.

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Definitions:

Undermine Cohesion

Actions or situations that negatively affect the unity and mutual support within a group or team.

Low Level of Trust

Refers to situations where there is minimal confidence in the reliability, truth, or ability of someone or something, often hindering cooperation and communication.

Maximize Cohesiveness

Strategies or practices aimed at strengthening the unity and solidarity of a group to achieve common goals.

Norms

Implicit rules and expectations that guide behavior of group members, helping to shape attitudes and actions within a social context.