5) At year-end, management decided to sell AFS securities with a face amount of $9,000 and an amortized cost of $8,150 for $8,800 cash. The sale would result in: a) A realized gain of $200. b) A realized loss of $200.

c) A realized gain of $650. d) A realized loss of $650.

6) The fraction of a fictional financial institutions total assets is 95% trading securities. A downside of fair value accounting treatment for these assets is: a) In periods of significant economic recession, the value of the firms assets will likely decline. b) In periods of significant economic recession, the value of the firms assets will likely increase.

c) It is more difficult for investors to use reported assets to determine the intrinsic value of the firm. d) The reported value of the assets is less useful for valuation, because they are not reported at cost.