All of the Following Data May Be Needed to Determine

question 9

Multiple Choice

All of the following data may be needed to determine the fair value of a forward contract at any point in time except

• A) The forward rate when the forward contract was entered into.
• B) The current forward rate for a contract that matures on the same date as the forward contract entered into.
• C) The future spot rate.
• D) A discount rate.
• E) The company's incremental borrowing rate.

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Definitions:

Permanent/Temporary

Classification of accounts where permanent accounts refer to items on the balance sheet and temporary accounts to items that pertain to the income statement.

Normal Balance

The side (debit or credit) of an accounting entry where increases to the account are recorded, depending on the type of account.

Financial Statement

Reports that summarize the financial performance, position, and cash flows of a business over a specified period.

Permanent/Temporary

Classification of accounts where permanent accounts are balance sheet items that carry over into the next fiscal year, and temporary accounts are income statement items that are closed at year-end.