In a fair value hedge, the concern is always that a loss will be incurred (1) on an existing asset or existing liability or (2) a firm commitment.

Name: In a fair value hedge, the concern is always that a loss will be incurred (1) on an existing asset or existing liability or (2) a firm commitment.
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Question

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In a fair value hedge, the concern is to mitigate the risk of changes in fair value that could affect profit or loss due to an existing asset, existing liability, or a firm commitment.

In a Fair Value Hedge, the Concern Is Always That