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Why Is the Value of Many Derivatives Difficult to Determine

Question 48

Multiple Choice

Why is the value of many derivatives difficult to determine for accounting purposes?


A) Many derivative decline in value over time,so only average values can be determined.
B) Many derivative fluctuate in value over time,so only average values can be determined.
C) Many derivatives are controlled by governments,so the stated value of a derivative may not be its actual value.
D) Many derivatives are private contracts for which there is no active market,so values are difficult to determine.

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