Which of the Following Statements About Nonrecurring and Other Special

question 109

Multiple Choice

Which of the following statements about nonrecurring and other special items is correct?

• A)Some special items,such as changes in the value of certain balance sheet accounts,are excluded from the calculation of net income.
• B)Nonrecurring items such as discontinued operations are presented above the income tax expense line on the income statement.
• C)Discontinued operations are reported net of tax as part of the income from continuing operations.
• D)Interest Expense is shown net of tax as part of Other Comprehensive Income.

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Definitions:

Bond Convexity

A measure of the curvature or the degree of the curve in the relationship between bond prices and bond yields, demonstrating how the duration of a bond changes as the interest rate changes.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, expressed as an annual rate.

Price Volatility

The rate at which the price of a security increases or decreases for a given set of returns, often measured by the standard deviation of historical returns.

Initial Yield

The initial yield is a financial measure indicating the first year's return on an investment in real estate or bonds, often expressed as a percentage of the investment's cost.