Which of the Following Is Not Included in the Definition

question 32

Multiple Choice

Which of the following is not included in the definition of an investment entity as per IFRS 10 Consolidated Financial Statements?

• A) Measures and evaluates the performance of substantially all of its investments on a cost basis.
• B) Measures and evaluates the performance of substantially all of its investments on a fair value basis.
• C) Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation or investment income.
• D) Obtains funds from one or more investors for the purpose of providing those investors with investment management services.

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Definitions:

Risk-Free Asset

A Risk-Free Asset is an investment that theoretically guarantees its return and has no variance in its expected payout, typically government-issued securities.

Asset Beta

A measure of the risk of an asset isolated from the firm's financial risk, particularly useful in capital asset pricing models (CAPM).

Risk-Free Asset

An investment with a guaranteed return, without any risk of financial loss.

Positive Rate

An interest rate or yield that is above zero, reflecting a positive return on investment.