A Company Uses Futures to Hedge Its Inventory

Multiple Choice

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

A) The company takes a short position in futures and records changes in their value in OCI.
B) The company takes a long position in futures and records changes in their value in income.
C) The company takes a short position in futures and records changes in their value in income.
D) The company takes a long position in futures and records changes in their value in OCI.