All of the Following Hedges Are Used for Future Purchase/sale

question 39

Multiple Choice

All of the following hedges are used for future purchase/sale transactions except

• A) Forward contracts used as a fair value hedge of a firm commitment.
• B) Options used as a fair value hedge of a firm commitment.
• C) Option contract cash flow hedge of a forecasted transaction.
• D) Forward contract cash flow hedges of a forecasted transaction.
• E) Forward contracts used to hedge a foreign currency denominated liability.

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Definitions:

Mental Alertness

A state of being awake and responsive to stimuli, indicating an ability to think clearly and quickly.

Caffeinated Beverage

A drink that contains caffeine, a natural stimulant that is found in coffee, tea, and cacao plants, known to enhance alertness and reduce feelings of tiredness.

REM Sleep

A unique phase of sleep in mammals and birds, characterized by random movement of the eyes, low muscle tone throughout the body, and the propensity of the sleeper to dream vividly.

REM Deprivation

The condition of being deprived of Rapid Eye Movement sleep, a crucial stage of the sleep cycle known for dreaming and important for memory consolidation.