The correct answer is A. The Orange County case highlights the importance of fully understanding complex derivative contracts before engaging in them. In this instance, Orange County suffered significant losses when Robert Citron, a treasurer, made a substantial bet on inverse floating swaps. The county's board of directors did not fully comprehend the nature of these contracts, and when interest rates increased, the investments backfired. Citron later confessed to not understanding the position he had taken or the risk exposure of the fund. This case underscores the necessity for a thorough understanding of financial instruments, especially derivatives, to avoid such financial disasters.