A company located in Canada spends $6,000 to purchase a foreign currency futures contract to buy US$500,000
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A company located in Canada spends $6,000 to purchase a foreign currency futures contract to buy US$500,000 at C$1.02:US$1.00. The contract matures 90 days later. Under which of the following circumstances could the company consider this future contract to be a fair value hedge for accounting purposes?
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