For which of the following reasons is the extension of forward contracts at non-current rates is discouraged: i.These could be used to conceal profit or losses. ii.These could be used to perpetrate fraud. iii.These could result in an unauthorised extension of credit. iv.These could result in confusing settlement instructions.
A) (i), (ii), (iii), & (iv).
B) (i), (ii) & (iii).
C) (i) & (iii).
D) none of the above.

Question

Quizplus · Accepted Answer

Extending forward contracts at non-current rates can conceal profits or losses, perpetrate fraud, and result in unauthorized credit extensions, but confusing settlement instructions are not a primary concern.

For Which of the Following Reasons Is the Extension of Forward