Describe the Difference in the Calculation of the Realized Gain

question 35

Essay

Describe the difference in the calculation of the realized gain or loss on the sale of an investment when the trading security classification is used relative to use of the available-for-sale classification.

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Definitions:

Standard Normal Variable

A random variable that has a mean of 0 and a standard deviation of 1, following the standard normal distribution.

Standard Normal Curve

The graphical representation of a normal distribution that has a mean of zero and a standard deviation of one, used in probability theory and statistics.

Z-score

A statistical measure representing the number of standard deviations a data point is from the mean.

Percentile

An indicator showing the value beneath which a certain percentage of data points in a collection of data lies.