Firms Engage in Transactions Involving Derivatives

Multiple Choice

Firms engage in transactions involving derivatives.For the most part, the complex parts of these transactions occur _____, but those transactions do _____ until, possibly, their settlement.

A) after the firm has acquired the derivative; not affect cash flows
B) before the firm has acquired the derivative; not affect cash flows
C) when the firm has acquired the derivative; not affect cash flows
D) after the firm has acquired the derivative; not affect net income
E) before the firm has acquired the derivative; not affect net income