1. Which reporting securities provide the highest cash returns (yields) from investments?

Trading securities

Available-for-sale securities

Held-to-maturity securities

2. Which interest rate are firms required to use to evaluate the ending balance of held-to-maturity securities on the last day of a fiscal period?

The market interest rate at acquisition

The latest market interest rate on the last day of the fiscal period

The expected market interest rate throughout the remaining life of the bond

The coupon rate

3. What is the most popular reporting securities when firms do not have a significant influence over the invested company's activities?

Trading securities

Available-for-sale securities

Held-to-maturity securities

Securities reported under the equity method.

4. In which financial statement is the Accumulated Other Comprehensive Income reported?

Income statement

Balance sheet

Statement of cash flow

5. Seahawk Corporation purchased 100,000 Pendant Corporation common shares on Jan 1 of 2018 for $5 per share and classified the investment as available-for-sale securities. The fair value of the Pendant investment was $6 per share on December 31, 2018, and $4.5 per share on December 31, 2019. During 2020, Seahawk sold all of its Pendant investment at $5.5 per share.

In its 2020 income statement, Seahawk would report __________:

A realized loss of $50,000.

A realized gain of $100,000.

A realized gain of $50,000.

A unrealized loss of $50,000.

A unrealized gain of $100,000.

A unrealized gain of $50,000.