The key criterion for qualifying as a hedge is that the hedging relationship:
A)Must be highly effective in achieving offsetting changes in fair values or cash flows.
B)Must have predictable results.
C)Must have fixed outcomes.
D)None of these.

Question

Quizplus · Accepted Answer

The key criterion for qualifying as a hedge is that the hedging relationship must be highly effective in achieving offsetting changes in fair values or cash flows. Predictable results and fixed outcomes are not criteria for qualifying as a hedge.

The Key Criterion for Qualifying as a Hedge Is That