Which of the Following Statements Is Not True

question 73

Multiple Choice

Which of the following statements is not true?

• A)Under the fair value through other comprehensive income model gains and losses are critical to the evaluation of management.
• B)Under the fair value through profit or loss model, both realized and unrealized gains and losses are reported in the statement of income.
• C)Under the amortized cost model, no unrealized gains or losses are reported.
• D)Non-strategic investments are purchased to generate investment income.

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Definitions:

Market Weight

An asset or portfolio composition that reflects the distribution of securities in the market, often used in the context of benchmarking investment performance.

Cost of Capital

This refers to the total cost of funds used for financing a business, including the cost of equity and debt.

Risk Level

The degree of uncertainty and the potential financial loss associated with an investment or business decision.

Net Present Value

An evaluation metric that analyzes the profitability of a projected investment by discounting future cash flows to their present value and subtracting the initial investment cost.