Learning Objective 10-6
1) One classification for investments in securities that is allowed by U.S. GAAP is ________.
A) mature
B) immature
C) available-for-sale
D) traded
2) If a company plans to hold debt securities until they mature, they are called ________.
A) held-to-maturity securities
B) trading securities
C) available-for-sale securities
D) conservative investments
3) Investments in debt and equity securities that a company has purchased to make a short-term profit are called ________.
A) held-to-maturity securities
B) trading securities
C) available-for-sale securities
D) speculative investments
4) Investments in debt and equity securities that a company may either hold or sell are called ________.
A) held-to-maturity securities
B) trading securities
C) available-for-sale securities
D) discretionary investments
5) Held-to-maturity securities are ________.
A) investments the company may hold or sell
B) investments in debt securities that a company plans to hold until they mature
C) investments in debt and equity securities that a company has purchased to make a short-term profit
D) investments in stocks that a company plans to hold until they mature
6) Trading securities are ________.
A) investments the company may hold or sell
B) investments in debt securities that a company plans to hold until the securities mature
C) investments in debt and equity securities that a company has purchased to make a short-term profit
D) discretionary investments with a specific maturity date
7) Available-for-sale securities are ________.
A) investments the company may hold or sell
B) investments in debt securities that a company plans to hold until the securities mature
C) investments in debt and equity securities that a company has purchased to make a short-term profit
D) discretionary investments with a specific maturity date
8) Abala Corporation purchased one hundred $1,000 bonds. The corporation intends to hold the bonds until they mature in two years. This investment is characterized as ________ securities.
A) held-to-maturity
B) discretionary
C) trading
D) available-for-sale
9) Abala Corporation purchased $50,000 worth of ABC Company stock. The corporation believes that the stock price will double within a few months and plans to sell the stock as soon as its target price is reached. This investment is characterized as ________ securities.
A) held-to-maturity
B) discretionary
C) trading
D) available-for-sale
10) Centrex Corporation purchased 500 shares of Pfizer stock. The managers of Centrex Corporation intend to sell the shares as soon as their target price is reached, which will probably be within the next three months. This investment is characterized as ________ securities.
A) available-for-sale
B) held-to-maturity
C) discretionary
D) trading