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” a derivative is held by a company and not designated as hedging instrument”
please make me understand this statement.
what i understand is that there is no difference between these two.. derivative and hedging instrument
thanksNo, there is a difference. A derivative may be held as a hedging instrument but, equally, a derivative may be held not as a hedging instrument.
A derivative is a derivative. But what was the purpose behind the acquisition of that derivative? Was it to serve as a hedge? Or is it simply a financial instrument that we have acquired and that has nothing to do with hedging?
Ok?
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