Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started