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  • Types of Hedging Activities

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    Arn Kyla
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    Hedges of foreign currency firm commitments can be used for future sales or purchases, not just future sales or current purchases/sales. An option designated as a fair value hedge is similar to a speculative derivative, not an option or forward contract designated as a cash flow hedge.

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    Hedges of foreign currency firm commitments can be used for future sales or purchases, not just future sales or current purchases/sales. An option designated as a fair value hedge is similar to a speculative derivative, not an option or forward contract designated as a cash flow hedge.

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    2 views1 page

    Types of Hedging Activities

    Uploaded by

    Arn Kyla
    Hedges of foreign currency firm commitments can be used for future sales or purchases, not just future sales or current purchases/sales. An option designated as a fair value hedge is similar to a speculative derivative, not an option or forward contract designated as a cash flow hedge.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Which of the following statements is true concerning hedge accounting?

    Hedges of
    foreign currency firm commitments are used for future sales only. Hedges of foreign
    currency firm commitments are used for future purchases only. Hedges of foreign
    currency firm commitments are used for current purchases or sales. Hedges of foreign
    currency firm commitments are used for future sales or purchases.
    General Feedback
    Hedges of foreign currency firm commitments are used for future sales or purchases.

    A speculative derivative would be similar to which type of hedge? An option


    designated as a cash flow hedge. An option designated as a fair value hedge. A
    forward contract designated as a cash flow hedge. A forward contract designated as a
    fair value hedge.
    General Feedback
    An option designated as a fair value hedge.

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