Which of the following instruments satisfy the conditions to offset a financial asset and a financial liability?
A) Several financial instruments that are passed as a single financial instrument, for example, a synthetic instrument
B) Futures contract
C) Financial assets that are pledged as collateral for a non-recourse liability
D) Financial assets that are set aside in trust by a debtor for the purpose of discharging an obligation without these assets being accepted by the creditor in settlement of the obligation.
E) None of the given answers

Question

Quizplus · Accepted Answer

Futures contracts can be used to offset both financial assets and liabilities as they involve an agreement to buy or sell an asset at a specified price and date in the future. The other given options do not necessarily satisfy the conditions for offsetting a financial asset and a financial liability.

Which of the Following Instruments Satisfy the Conditions to Offset