[Instructor: Use This Question If the Associated Slide Presentations Have

question 13

Multiple Choice

[Instructor: Use this question if the associated slide presentations have been used.] Relationships can be used for which of the following purposes?

• A) to explain movements in one variable
• B) to predict and forecast
• C) to create theory
• D) all of the above

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Definitions:

Trading Securities

Financial assets that a company holds for the purpose of selling them in the short term to generate profit.

Fair Value

An estimated market value of an asset or liability, based on current prices in an active market or valuation techniques.

GAAP

Widely Recognized Accounting Standards; a set of standard accounting practices and rules routinely adhered to for financial reporting purposes.

Fair Value Accounting

An accounting approach where assets and liabilities are recorded at their current market value, not just historical cost.