n NISM Certifications
VIII NISM Series VIII
Medium

How is the forward contract, which is for hedging purposes, accounted for in books of accounts?

Practice question from NISM Series VIII - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    The premium or discount will be shown in the Profit and Loss Account

  2. B

    The premium or discount will be ignored

  3. The premium or discount will be amortized over the life of the contract

    Correct answer

  4. D

    No premium or discount will be recognized

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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