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

Question

Quizplus · Accepted Answer

Since the managers intend to sell the shares as soon as their target price is reached, this investment would be classified as "trading" securities according to accounting standards. Trading securities are defined as securities that are bought and held to be resold in the near term, with the intent of generating profits from short-term price fluctuations.

Centrex Corporation Purchased 500 Shares of Pfizer Stock