Part C 1. A company purchases debt investments and intends to resale it in the near future to generate profits. Explain how should the company classify this debt investment? (2 marks) 2. In the past few years, a company holds a large amount of debt investments, the fair value of which is highly volatile. However, the net income for the past few years is very stable. Discuss one possible reason for this situation. (3 marks) 3. You are asked to prepare financial statements for your company. IFRS requires that both cost and fair value of all financial instruments be reported in the notes to the financial statements. However, when you are gathering information about the fair value of your company's debt investment, you find that the debt does not have a quoted price in the market. Neither can you find similar debts in the active market as well. How should you measure the fair value of the debt investment in this situation? (3 marks)