Which of the Following Is/are Elements of a Derivative

question 29

Multiple Choice

Which of the following is/are elements of a derivative?

• A)Many derivatives require no initial investment, that is, no initial cash payment to the counterparty.
• B)A derivative may have zero initial cost, but potentially large positive or negative fair values later.
• C)Both U.S.GAAP and IFRS require that firms record derivatives at their fair values on the balance sheet date.
• D)The firm usually acquires a derivative by exchanging promises with a counterparty, such as a commercial or investment bank.The exchange of promises is a mutually unexecuted contract.
• E)all of the above

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Definitions:

Closed Fracture

A type of bone fracture where the skin over the wound remains intact and there is no visible wound over the fracture site.

Comminuted Fracture

A type of bone fracture characterized by the bone being broken into more than two pieces, often requiring surgical intervention for proper healing.

Pressure Bandage

A type of bandage applied tightly to a limb or other parts of the body to exert pressure, commonly used to control bleeding or swelling.

Strain

Injury to muscles from tension caused by overuse or misuse.