Which of the Following Statements Is True About Investments Classified

question 126

Multiple Choice

Which of the following statements is true about investments classified as trading securities?

• A) The investor's intent and ability is to hold them to maturity.
• B) They are valued on the balance sheet at cost.
• C) They can consist of debt, but not equity, securities.
• D) Changes in market value are reflected as part of net income.

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Definitions:

Security Interest

A security interest is a legal right granted by a debtor to a creditor over the debtor's property to secure the repayment of a debt.

Financing Statement

A document filed to indicate a security interest in personal property, used to publicize a creditor's right to possible repossession of goods.

Perfection

In legal finance, it refers to the process of securing a lien or interest in a borrower's collateral, making it legally enforceable against third parties.

Records Mortgage

The formal documentation of a mortgage loan agreement that is filed with a local government office, making it a public record.