【单选题】To account for a forward contract cash flow hedge of a foreign currency denominated asset or liability at initiation date requires which of the following?
A.
1. Recognize the transaction (sale or purchase) and foreign currency denominated asset or libility 2. Recognize option as an asset (purchase price is fair value)
B.
1. No entry related to the firm commitment (zero value) 2. No entry related to forward contract (zero fair value)
C.
1. Recognize the transaction (sale or purchase) and foreign currency denominated asset or liability 2. No entry related to forward contract (zero fair value)
D.
1. Recognize the transaction (sale or purchase) 2. Recognize the option as a liability
【单选题】A company due to pay a certain amount of a foreign currency in the future decides to hedge with futures contracts. Which of the following best describes the advantage of hedging?
A.
It leads to a better exchange rate being paid
B.
It leads to a more predictable exchange rate being paid
C.
It caps the exchange rate that will be paid
D.
It provides a floor for the exchange rate that will be paid
【单选题】Except for ( ), the following foreign exchange transactions can be used by companies whose foreign exchange receipts and payments are in the future to hedge against exchange rate risk.