Firms Often Acquire Derivative Instruments to Hedge Interest Rate, Exchange

Multiple Choice

Firms often acquire derivative instruments to hedge interest rate, exchange rate, commodity price, and other risks.U.S.GAAP and IFRS classify derivatives into which of the following categories?

A) Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, only.
B) Cash flow hedges of an existing asset or liability or of a forecasted transaction, only.
C) Nonhedging derivative, only.
D) Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, cash flow hedges of an existing asset or liability or of a forecasted transaction, and nonhedging derivative.
E) none of the above