Firms Sometimes Acquire Debt Securities with the Intention of Holding

question 31

Multiple Choice

Firms sometimes acquire debt securities with the intention of holding these securities until maturity.U.S.GAAP and IFRS require firms to measure marketable securities for which firms have an intent and ability to hold to maturity by _____.A firm initially records these debt securities at acquisition cost.This acquisition cost will differ from the maturity value of the debt if the coupon rate on the bonds differs from the _____.

• A)the imputed interest method; required market yield on the bonds at the time the firm acquired them
• B)the straight-line method; required market yield on the bonds at the time the firm acquired them
• C)the effective interest method; required market yield on the bonds at the time the firm acquired them
• D)the effective interest method; required market yield on the bonds at the time the bonds were originally issued.
• E)the straight-line method; required market yield on the bonds at the time the bonds were originally issued.

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Definitions:

Isolated Individuals

Persons who are separated from others, often referring to those who are in solitary confinement or live in seclusion.

Environment

Relates to the natural world and the surrounding conditions in which an individual, animal, or plant lives or operates.

Sundown Towns

Towns or communities in the United States that practiced racial segregation by excluding nonwhites through local laws, intimidation, or violence, particularly after sunset.

Jim Crow Towns

Municipalities in the United States where laws and customs rigidly enforced racial segregation and discrimination against African Americans.