Question

What is the usual characteristic of the notional face value in derivatives?

a.

It is the actual market value of the contract.

b.

It represents the maximum potential loss.

c.

It is the value or volume of the contract.

d.

It is irrelevant to the derivative's value.

Posted under IC 89 Management Accounting

Answer: (c).It is the value or volume of the contract. Explanation:The notional face value in derivatives is usually the value or volume of the contract, serving as a reference amount.

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Q. What is the usual characteristic of the notional face value in derivatives?
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