Match each of the definitions that follow with the appropriate investment term (a-j).
-Debt and equity securities purchased and sold to earn short-term profits from changes in the market price
A)Debt securities
B)Equity securities
C)Investor
D)Investee
E)Cost method
F)Trading securities
G)Available-for-sale securities
H)Held-to-maturity securities
I)Equity method
J)Business combination

Question

Quizplus · Accepted Answer

Trading securities are purchased and sold to earn short-term profits from changes in the market price.

Answer: A, B, G, H, I
 These investment terms refer to different types of securities that a company may hold in its portfolio. Debt securities (A) represent loans made by an investor to an investee, while equity securities (B) represent ownership in a company. Available-for-sale securities (G) and held-to-maturity securities (H) are types of debt securities that a company may hold for different reasons. The equity method (I) is used by an investor to account for investments in investees over which it has significant influence.

Answer: C
 An investor is someone who invests money in securities or other investments with the goal of earning a return on that investment.

Answer: D
 An investee is a company or other entity that receives investment funds from an investor.

Answer: E
 The cost method is a way of accounting for an investment in which the investor records the investment at its original cost and does not adjust the value of the investment for changes in its market value or other factors.

Answer: J
 A business combination occurs when two or more companies combine to form a single entity. This can happen through a merger, acquisition, or other types of transactions.

Match Each of the Definitions That Follow with the Appropriate