H E Heading 1 16. Say which of the following three statements is (are) true: ONE: 20% investment is an automatic criterion; that is, if the investment is less than 20%, the equity method cannot be used. TWO: If the investor owns 49% of Investee's common stock, they have to use the equity method regardless of the circumstances. THREE: The only way an investor can gain control over another company is by acquiring more than 50% of the common stock. A. One, two and three. b. Only THREE c. Two and three d. None of the three 17. The fair value option (FVO) can be applied to the following investments: A. Classified as Hold-to-Maturity (HTM) b. Classified as available for sale (AFS) c. Accounted for under the equity method d. All of the above 18. Once the Market Value Option (FVO) is adopted, the decision is irreversible. A. TRUE b. FALSE #I