Which of the Following Is NOT a Possible Advantage to Holding

question 38

Multiple Choice

Which of the following is NOT a possible advantage to holding marketable securities?

• A)Price appreciation
• B)Dividends
• C)Interest earnings
• D)All of the above are potential advantages to owning marketable securities.

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Definitions:

Amortized Cost

Amortized cost is the initial investment amount of a financial asset or liability adjusted for principal repayments, plus or minus the cumulative amortization of any difference between the initial amount and the maturity amount, and reduced by any potential impairment or uncollectibility.

Unrealized Holding

Unrealized holding refers to the increase or decrease in the value of an investment that has not yet been sold by the holder and thus, any potential gain or loss is not yet recognized in the financial statements.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an open and competitive market.

Reporting Period

The reporting period is the span of time covered by financial reports, and it can be monthly, quarterly, or annually.