Question

How are realized gains and losses on investment securities calculated: Group of answer choices a. Sales proceeds less cost b. Sales proceeds less cost + prior unrealized losses recognized c. Sales proceeds less cost – prior unrealized gains recognized d. Both a and b

Answer 1

Realized gains and losses on investment securities calculated (D). Both a and b

Explanation:

Realized gain/loss is the Total  amount of gain and loss realized  from the   sale of securities.

A realized loss refers to the monetary value of a loss that is the outcome of  a trade.

A realized gain is defined as  the excessive cost obtained after the deduction of the cost and the prior unrealized losses(or adjusted cost basis) over the proceeds from the sale.

An Unrealized gain can be defined as an increase in the value of the investment which is the outcome of an increase in the market value

Thus we can say that Realized gains and losses on investment securities calculated (D). Both a and b