An investment is classified as short term or long term based on
A)whether the investment can be sold immediately.
B)the length of time the investor expects to hold it.
C)the purpose for which it is held.
D)the dollar amount of the investment.

Question

Quizplus · Accepted Answer

The length of time the investor expects to hold the investment is the primary determinant of whether it is classified as short-term or long-term. Short-term investments are typically those that the investor intends to hold for a year or less, while long-term investments are those that the investor plans to hold for more than a year. The other options listed are not reliable indicators of whether an investment is short-term or long-term.

An Investment Is Classified as Short Term or Long Term