The balance sheet carrying value of Confabulated’s investment portfolio at 31 December 2009 would have been higher if which of the securities had been reclassified as a held for trading security?

A. Bugle.

B. Cathay.

C. Dumas.

Burton Howard, CFA, is an equity analyst with Maplewood Securities. Howard is preparing a research report on Confabulated Materials, SA, a publicly traded company based in France that complies with IFRS. As part of his analysis, Howard has assembled data gathered from the fi nancial statement footnotes of Confabulated’s 2009 Annual Report and from discussions with company management. Howard is concerned about the eff ect of this information on Confabulated’s future earnings.

Information about Confabulated’s investment portfolio for the years ended 31 December 2008 and 2009 is presented in Exhibit 1. As part of his research, Howard is considering the possible effect on reported income of Confabulated’s accounting classification for fixed income investments.

In addition, Confabulated’s annual report discusses a transaction under which receivables were securitized through a special purpose entity (SPE) for Confabulated’s benefit.

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EXHIBIT 1 Confabulated's Investment Portfolio ( Thousands) Bugle AG Available-for-sale 25,000 29,000 28,000 Characteristic Classification Cost* Market value, 31 December 2008 Market value, 31 December 2009 Cathay Corp Held-to-maturity 40,000 38,000 37,000 Dumas SA Held-to-maturity 50,000 54,000 55,000