In Which of the Following Activities Is Hedge Accounting Prohibited

question 3

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 swap with a swaption

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Definitions:

Coercive Acts

A series of British laws passed in 1774 aimed at punishing the Massachusetts colonists for the Boston Tea Party.

Quebec Acts

Legislative acts of the British Parliament in 1774 intended to provide a framework for the governance of the Quebec Province, including religious freedom for Catholics and restoration of French civil law.

Representative Government

A system of government in which public policies are made by officials selected by the voters and held accountable in periodic elections.

British Concepts

Ideas, philosophies, or principles that originate from or are associated with Great Britain, encompassing a wide range of fields including law, governance, and social norms.