A Local Government Began the Year with a Portfolio of Securities

question 47

Multiple Choice

A local government began the year with a portfolio of securities with an historical cost of $1,200 and a fair value of $1,240.During the year the government acquired an additional security at a cost of $260 and sold for $200 a security that had an historical cost of $172 and a fair value at the beginning of the year of $190.At the end of the year, the securities portfolio had a fair value of $1,330.The amount that should be recognized on the financial statements for the year as investment income is

• A)$10.
• B)$20.
• C)$28.
• D)$30.

Calculate the present value of a series of future payments or a future lump sum.

Analyze the financial implications of variable interest rates on loans and investments.

Apply compound interest formulas to real-life financial scenarios.

Understand the effect of time on the growth of investments and savings.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, typically expressed as an annual percentage of the principal.

Federal Reserve

The Federal Reserve is the central bank of the United States, responsible for regulating the monetary and financial system.

Money Supply

Money Supply is the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in bank accounts.

Interest Rate

The cost of borrowing money, typically expressed as a percentage of the principal, paid over a specific period.