On October 1, Bordeaux, Inc., a calendar year-end firm, invested in a derivative designed to hedge the risk of changes in fair value of certain assets, currently valued at $1.5 million. The hedge was determined to be highly effective. On December 31, the fair value of the hedged assets decreased by $350,000, and the fair value of the derivative increased by $345,000. Bordeaux should recognize a net effect on earnings for the year of $5,000 $345,000 $350,000 $0