At the beginning of its fiscal year, a local government owned an investment with a historical cost of $85 and a fair value of $95. During the year, dividends of $2 were received. At the end of the year, the investment had a fair value of $100. The amount that should be recognized on the governmental fund financial statements for the year as investment income is

1. $-0-.
2. $7.
3. $15.
4. $17.

Explanation to answer