A company uses futures to hedge its inventory. Which statement is true concerning the hedge?

Select one:

A. The company takes a short position in futures and records changes in their value in income.

B. The company takes a long position in futures and records changes in their value in OCI.

C. The company takes a long position in futures and records changes in their value in income.

D. The company takes a short position in futures and records changes in their value in OCI.

A company uses futures to hedge a firm commitment to buy inventory. Which statement is true concerning the hedge?

Select one:

A. The company takes a long position in futures and records changes in their value in income.

B. The company takes a long position in futures and records changes in their value in OCI.

C. The company takes a short position in futures and records changes in their value in income.

D. The company takes a short position in futures and records changes in their value in OCI.

A company uses futures to hedge a forecasted purchase of inventory. Which statement is true concerning the hedge?

Select one:

A. The company takes a long position in futures and records changes in their value in income.

B. The company takes a short position in futures and records changes in their value in income.

C. The company takes a long position in futures and records changes in their value in OCI.

D. The company takes a short position in futures and records changes in their value in OCI.