A fair value hedge may be used for all of the following except:
A)a purchase order.
B)inventory of corn.
C)long-term debt.
D)anticipated sales of aluminum.

Question

A fair value hedge may be used for all of the following except:
A)​a purchase order.
B)​inventory of corn.
C)​long-term debt.
D)​anticipated sales of aluminum.

Quizplus · Accepted Answer

A fair value hedge is used to hedge exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, not for anticipated transactions like future sales.

A Fair Value Hedge May Be Used for All of the Following