Which Statement Is Correct

question 50

Multiple Choice

Which statement is correct?

• A)An investment in a security at FVPL must be classified as a cash equivalent.
• B)An investment in a security at amortized cost must be classified as cash equivalent.
• C)An investment in a security held to meet short-term cash commitments must be classified as a cash equivalent .
• D)An investment in a security at FVOCI must be classified as a cash equivalent.

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Definitions:

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, often represented by the yield on government securities.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Capital

The financial assets or resources that individuals or companies use to fund their operations and invest in their businesses.

Financial Situation

An individual's or organization's current status in terms of income, expenses, assets, and liabilities, impacting their ability to generate cash flow and meet financial obligations.