which of the following statements is are true regarding derivative financial instrum 606369

Which of the following statements is(are) true regarding derivative financial instruments?

1. I. Derivative financial instruments should be measured at fair value and reported in the balance sheet as assets or liabilities.
2. II. Gains and losses on derivative instruments not designated as hedging activities should be reported and recognized in earnings in the period of the change in fair value.
   1. a. I only.
   2. b. II only.
   3. c. Both I and II.
   4. d. Neither I nor II.