Firms Often Acquire Derivative Instruments to Hedge Interest Rate, Exchange

question 53

Multiple Choice

Firms often acquire derivative instruments to hedge interest rate, exchange rate, commodity price, and other risks.U.S.GAAP and IFRS classify derivatives into which of the following categories?

• A)Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, only.
• B)Cash flow hedges of an existing asset or liability or of a forecasted transaction, only.
• C)Nonhedging derivative, only.
• D)Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, cash flow hedges of an existing asset or liability or of a forecasted transaction, and nonhedging derivative.
• E)none of the above

Understand the global trends in food production and the contributing factors to food insecurity.

Comprehend the impact of the Green Revolution and the need for sustainable agriculture methods.

Recognize the relationship between agriculture and critical environmental issues like soil degradation and water scarcity.

Understand the role of traditional agriculture and its comparison with large-scale modern farming techniques in global food security.

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Definitions:

Required Disclosure

Information that companies are obligated to provide in their financial reports to ensure transparency and to comply with regulatory standards and accounting principles.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.

Goodwill

Represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. It reflects intangible assets like brand reputation and customer relationships.

Inventoriable Costs

Costs associated with obtaining or manufacturing products intended for sale, which become part of a company’s inventory.