All of the Following Are True Statements When Measuring Hedge

question 56

Multiple Choice

All of the following are true statements when measuring hedge effectiveness except:

• A) Effectiveness means there is an approximate offset with the range of 80% to 125% of the changes in the fair value of the cash flows
• B) Effectiveness means there is an approximate offset in fair value to the risk being hedged.
• C) A Company may elect to choose from several different measures for assessing hedge effectiveness.
• D) Effectiveness must be assessed at least annually when the company reports their annual financial statements.

---

Definitions:

Video Conference Interview

An interview conducted remotely using video communication software, allowing participants to see and speak with each other in real-time over the internet.

Risk-Taking

The willingness to engage in behaviors or decisions that entail potential losses or failure in pursuit of potential gains.

Electronic Communication

The transmission of information using electronic media such as email, text messaging, and social networking sites.

Risk-Seeking

A tendency to pursue opportunities with potentially high rewards despite the associated high risks.