In Accounting for Non-Influential Securities

question 111

Multiple Choice

In accounting for non-influential securities:

• A)The GAAP concept of "trading securities" is commonly referred to as "financial
• Assets at fair value through profit and loss" under IFRS
• B)The IFRS concept of "trading securities" is commonly referred to as "financial
• Assets at fair value through profit and loss" under GAAP
• C)The GAAP concept of "available-for-sale securities" is commonly referred to as "available-for-sale financial assets" under IFRS
• D)The IRFS concept of "available-for-sale securities" are commonly referred to as "available-for-sale financial assets" under GAAP
• E)Both A and C above are true statements

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Definitions:

Market Risk Premium

The additional return an investor requires for holding a risky market portfolio instead of risk-free assets, reflecting the extra risk.

Required Return

The minimum expected return by investors for investing in a particular asset, considering the risk associated with it.

Beta

It is a measure of a stock's volatility in relation to the overall market, indicating the stock's relative risk.

Risk-free Rate

The return on investment with no risk of financial loss, typically associated with government bonds.