In Which of the Following Activities Is Hedge Accounting Prohibited

question 7

Multiple Choice

In which of the following activities is hedge accounting prohibited?

• A)hedging an overall portfolio as opposed to an individual transaction
• B)using short calls to protect a long asset
• C)using long puts to protect an asset
• D)hedging a long position with a short futures
• E)hedging a swapt with a swaption

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Definitions:

Carpals

The eight small bones that make up the wrist, connecting the hand to the forearm.

Metacarpals

The five long bones in the hand that are located between the wrist (carpal bones) and the fingers (phalanges).

Tarsals

The group of seven bones in the foot located between the lower leg bones and the metatarsals of the foot.

Metatarsals

The five long bones in the foot located between the ankle and toes, crucial for walking and movement.