The Purpose of a Hedge on an Identifiable Commitment Where

question 2

Multiple Choice

The purpose of a hedge on an identifiable commitment where the U.S.company is selling goods is to:

• A)​fix the basis of sales revenue to the date of the commitment
• B)​eliminate all exchange gains/losses from the date of commitment to the date of settlement
• C)​fix the basis of cost of goods sold to the date of commitment
• D)​eliminate any exchange gains/losses from the transaction date to the settlement date

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Definitions:

Elastic

A term used in economics to describe a situation where the demand or supply for a good or service significantly changes in response to a change in price.

Product Differentiation

A tactic used by companies to distinguish their products from those of competitors by highlighting unique features.

Customization

The process of modifying goods or services to meet specific customer preferences or requirements.

Americans

Refers to the citizens or natives of the United States, often in the context of discussing national identity, culture, or social issues.