Problem

The effective portion of a loss associated with a change in FV of a derivative instrument should be reported as a component of OCI only if the derivative is appropriately designated as a (circle one):

a) Cash flow hedge of the foreign currency exposure of a forecasted transaction.

b) FV hedge of the foreign currency exposure of an unrecognized firm commitment.

c) FV hedge of the foreign currency exposure of a recognized asset or liability for which a foreign currency transaction gain or loss is recognized in earnings.

d) Speculation in a foreign currency.