Unrealized Gains and Losses on Trading Securities Are Not Included

question 28

True/False

Unrealized gains and losses on trading securities are not included in the calculation of net income.

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Definitions:

Market Rate

The prevailing interest rate available in the marketplace for securities or loans of a similar risk and maturity.

Corporation's Bonds

Debt securities issued by corporations to raise capital, with the promise to pay back the principal amount along with interest at specified dates.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage.

Premium

The excess of the issue price of bonds over their face amount; the excess of the issue price of stock over its par value.