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question 7

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Definitions:

Fair Value

The estimated market value of an asset or liability, based on current prices in an open and competitive marketplace.

Equity Method

A method of accounting for investments in which the investment is initially recorded at cost and subsequently adjusted for the investor’s share of the investee’s net income or losses and dividends received.

Significant Influence

It refers to the power to participate in the financial and operating policy decisions of an investee but not control those policies.

Trading Security

A financial asset that is bought and sold with the intention of generating profits from short-term fluctuations in its price.

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