A Lending Institution That Sells Lower-Yielding Securities at a Loss

question 24

Short Answer

A lending institution that sells lower-yielding securities at a loss in order to reduce current taxable income,while simultaneously purchasing higher-yielding new securities in order to boost future returns is doing a(n)_______________.

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Definitions:

Statement of Revenues

A financial report detailing a company or organization's sources of income over a specific period of time.

Modified Accrual

An accounting method that records revenues when they are earned and measurable and expenses when they are incurred, regardless of when cash transactions occur.

Program Revenues

Income directly generated by specific programs or services, typically reported by governmental entities to reflect how resources are tied to particular activities.

Fiscally Independent

Having the authority to raise revenue through taxation and make spending decisions independently, typically referring to governmental units.