Advanced Accounting Chapter 9 exam 100% solved

Advanced Accounting Chapter 9 exam 100% solved With regard to the corporate strategy used to hedge foreign exchange risk - ANSWERcompanies follow a variety of different strategies An increase in the fair value of a foreign currency forward contract used to hedge a fair value exposure of a foreign currency denominated asset or liability is reported as - ANSWERAn asset on the balance sheet. And A gain in net income The fair value of a foreign currency firm commitment that is being hedged by a foreign currency option is determined by referring to changes in the - ANSWERspot rate for the foreign currency To qualify for hedge accounting, a foreign currency derivative must be highly ____ in hedging foreign exchange risk - ANSWEReffective A foreign currency forward contract to purchase foreign currency at a specific future date will be beneficial if - ANSWERthe forward rate is lower than the future spot rate. The price at which foreign currency can be purchased with U.S. dollars is the ____ rate for that foreign currency. - ANSWERexchange