If the fair value of a trading security declines because of a credit loss:

Multiple Choice

• The investment is not written down to fair value.

• The investment is written down to fair value, and an "impairment loss" is recognized in net income.

• The investment is written down to fair value, and the impairment loss is recognized in other comprehensive income.

• The investment is treated the same way as accounting for the investment as fair value through net income.