Question

DEFINITION TERM 1. Investments in debt securities that are not held-to-maturity or trading. 2. Investments in debt securities that are actively traded. 3. Investments in debt securities intended to be held until maturity. 4. Investments in equity securities with significant influence.

Answer 1

Answer:

1. Available-for-sale securities.

2. Trading.

3. Held-to-maturity.

4. Significant influence.

Explanation:

An investment can be defined as the acquisition of fixed capital assets, items or goods for the sole purpose of generating income in the future. The goal of all investors is to purchase assets or properties that would appreciate over time i.e an increase the value of the assets compared to when it was acquired.

The various types of an investment include the following;

1. Available-for-sale securities: investments in debt securities that are not held-to-maturity or trading.

2. Trading: investments in debt securities that are actively traded. This type of debt securities are usually reported as current assets.

3. Held-to-maturity: investments in debt securities intended to be held until maturity. Depending on the maturity of the debt securities, held-to-maturity securities are reported in long-term or current assets.

4. Significant influence: investments in equity securities with significant influence.