Question
Kroshka Holdings Corporation has several investments in debt and equity securities of other companies: 1. 10-year BCE bonds, intended to be held for the duration
Kroshka Holdings Corporation has several investments in debt and equity securities of other companies:
1. 10-year BCE bonds, intended to be held for the duration of the bonds
2. 10-year GE bonds, intended to be sold if interest rates go down
3. 5-year Government of Canada bonds, intended to be sold if cash is needed
4. A 180-day treasury bill
5. Bank of Montreal preferred shares, purchased for the dividend income
6. TMX common shares, purchased to sell in the near term at a profit. These shares are part of an investment portfolio that is actively traded.
Instructions:
a) Indicate whether each of the above investments is a passive or strategic investment
b) Indicate whether each of the above investments would be classified as a short-term (current assest) of long-term investment on Kroshka Holdings' balance sheet.
c) For each investment that you classified as passive in (a), indicate whether it is a held-for-trading, available-for-sale, or held-to-maturity security.
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