All of the following hedges are used for future purchase/sale transactions except
A) Forward contracts used as a fair value hedge of a firm commitment.
B) Options used as a fair value hedge of a firm commitment.
C) Option contract cash flow hedge of a forecasted transaction.
D) Forward contract cash flow hedges of a forecasted transaction.
E) Forward contracts used to hedge a foreign currency denominated liability.

Question

Quizplus · Accepted Answer

Forward contracts used to hedge a foreign currency denominated liability are not specifically related to future purchase/sale transactions but rather to managing foreign exchange risk associated with existing liabilities.

All of the Following Hedges Are Used for Future Purchase/sale