"Buy and Hold" Involves Buying Stocks and Holding Them

question 122

Multiple Choice

"Buy and hold" involves buying stocks and holding them:

• A) until a cheaper stock comes along.
• B) for a time proportional to the real interest rate.
• C) until the price increases even just a little.
• D) for the long run.

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Definitions:

Fair Value

Fair value is an estimate of the market value of an asset, based on its current price in a fair and open market transaction.

Bonus Method

A method in accounting for partnerships where a new partner's investment is recorded at an amount that is different from the stated value of the partnership's net assets, affecting the capital accounts of the existing partners.

Journal Entry

A journal entry is a record of a business transaction in the accounting books, detailing the financial effects of that transaction.

Net Income

The company's net income following the deduction of all costs and taxes from its earnings.