Question: 1. Smith & Co. used a forward contract to hedge a transaction that hasn't taken place yet, but likely will take place (such as receiving

1. Smith & Co. used a forward contract to hedge a transaction that hasn't taken place yet, but likely will take place (such as receiving an order for future delivery of goods from a customer) is:

Not allowed by GAAP

known as a hedge of a future commitment

knows as a fair value hedge

known as a hedge of a firm commitment

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