Free CFE Exam Braindumps (page: 40)

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Which of the following is NOT the permitted hedge relationships identified by FASB?

  1. hedges of fair value exposures
  2. hedges of formal inception
  3. hedges of cash flow exposures
  4. hedges of foreign currency exposures

Answer(s): B



Under the hedge of a net investment in a foreign operations model, the is recorded on the balance sheet at fair value with changes in fair value as a component of other comprehensive income

  1. derivative
  2. adjustment accountability
  3. foreign operations
  4. company investment

Answer(s): A



To determine whether a contract has an embedded derivative which criteria must be met?

  1. It must be considered a derivative if freestanding
  2. It is clearly and closely related to the host
  3. The contract is already carried at fair value through earnings
  4. All of the above

Answer(s): A



If the referenced investment portfolio return is positive, the ceding company owes the return to the ceding company.

  1. True
  2. False

Answer(s): A






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