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Determine effect on cg ability to apply hedging accounting

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"As the coronavirus pandemic spreads further, Asia's stocks were poised to plunge as panic gripped world financial markets and even safe-haven assets such as gold were ditched to cover losses in the wipeout. It was also reported that currency trading was erratic amid poor liquidity and a rush to secure financing in dollars" (The Star, 13 March 2020). Assume that CG investment portfolio was also affected by the significant drop in market shares price as reported above.

Question (i) Discuss whether hedging will be effective to minimize the impact of the sharp decrease in market share price of its investment portfolio.

Question (ii) Based on your discussion in (d-i) determine the effect on CG's ability to apply hedging accounting as per MFRS 9 Financial Instruments: Recognition and Measurement.

Reference no: EM132582418

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