In General, Derivative Instruments Are

question 40

Multiple Choice

In general, derivative instruments are

• A) Not reported in a company's balance sheet because their impact on the company is not yet known.
• B) Reported in the balance sheet at fair value and changes in their fair value are reported in earnings.
• C) Reported in the balance sheet at historical cost and changes in their fair value are reported in earnings.
• D) Reported in the balance sheet at fair value and changes in their fair value are reported in other comprehensive income.

Understand and calculate the impact of making additional payments or lump sum payments on the amortization period of a mortgage.

Analyze different mortgage options to determine the most cost-effective choice.

Understand the concept of interest compounding and its impact on mortgage payments and amortization.

Determine the principal amount paid off at a certain point in a mortgage payment schedule.