In its 2015 annual report, Starbucks shows that as of September 30, 2015, it owned $81.3 million in marketable securities. Assume that Starbucks sold no marketable securities during the month of October 2015.

REQUIRED:
a. What would have happened to Starbucks’s net income for the month ended October 31, 2015, if the stock market crashed and share price valuations fell, on average, by 50 percent?
b. Under the same scenario as (a), what could management have done to lessen the impact of the crash on net income? What management decision would have increased the negative impact on net income?