Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

BEC > Derivatives > Flashcards

Derivatives Flashcards

1
Q

What are the three characteristics of derivatives?

A 
NUNS
No net investment
Underlying 
Notional amount
Settlement (net)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is a fair value hedge?

A

Hedge against a firm commitment, asset, or liability

Reported in earnings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a cash flow hedge?

A

Hedge against fluctuation in future cash flows
Effective portion reported in OCI
Ineffective portion reported in earnings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is basis risk?

A

Changes in value of derivative may not match exactly changes in the value of asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly

BEC (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions