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Can rich classify this proposed financial instrument

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Reference no: EM132326171

Case : The Rich Company seeks to limit its potential exposure from future variable- interest debt by engaging in a cash flow hedge. Thus, it seeks to acquire a financial instrument that varies in price "in opposition" to Rick's expected payments on this debt instrument. However, it is unsure of the effectiveness of this hedging instrument-since it is unsure of the expected of such transactions. Can Rich classify this proposed financial instrument as a cash flow (or other) hedge?

Reference no: EM132326171

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