Fair Value Is Relied on

question 173

Multiple Choice

Fair value is relied on

• A) less under IFRS than under GAAP.
• B) more under IFRS than under GAAP.
• C) equally under IFRS and GAAP.
• D) infrequently under IFRS.

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Definitions:

Rate Of Return

is the gain or loss on an investment over a specific period, expressed as a percentage of the investment’s initial cost.

Inflation Risk

The likelihood that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency.

Term Structure

The relationship between interest rates or bond yields and different terms to maturity, typically depicted in a yield curve.

Liquidity Premium

The portion of a nominal interest rate or bond yield that represents compensation for lack of liquidity.