QUESTION 34 Which of the following is false? A derivative is a financial instrument whose value changes in response to changes in an underlying observable variable, such as a stock price, an interest rate, a currency exchange rate, or a commodity price. B. Unlike most equity securities, derivatives have a definite settlement date. OC. A derivative requires an investment that is small, relative to the investment in a contract that is similarly exposed to changes in market factors, or requires no investment at all. Firms may use derivative instruments to hedge the risks that arise from changes in interest rates, foreign exchange rates, and commodity prices. E. None of the above QUESTION 35 The U.S. GAAP and IASB require that firms record derivatives on the balance sheet date at... A. future value of present cash flows B. present value of future cash flows C. fair value D. historical cost E. amortized acquisition cost