Question

How should margins or unamortized premiums paid in connection with financial derivatives be treated as per Regulation 15(b)?

a.

Always as "Approved Investments"

b.

Always as "Other than Approved Investments"

c.

As "Approved Investments" only when the derivatives position constitutes a hedge for the underlying investments or portfolio

d.

As "Other than Approved Investments" only when the derivatives position constitutes a hedge for the underlying investments or portfolio

Posted under IC 89 Management Accounting

Answer: (c).As "Approved Investments" only when the derivatives position constitutes a hedge for the underlying investments or portfolio Explanation:Margins or unamortized premiums paid in connection with financial derivatives shall be treated as "Approved Investments" under certain conditions, specifically when the derivatives position constitutes a hedge for the underlying investments or portfolio.

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Q. How should margins or unamortized premiums paid in connection with financial derivatives be treated as per Regulation 15(b)?
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