Question

Classify the following investments. Each case is independent of the other.

Investment Classifications

(a)A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon as the value increases, which is expected next month, it will be sold.

(b)10% of the outstanding stock of Farm-Co was purchased. The company is planning on eventually getting a total of 30% of its outstanding stock.

(c)10-year bonds were purchased this year. The bonds mature at the first of next year.

(d)Bonds that will mature in 5 years are purchased. The company would like to hold them until they mature, but money has been tight recently and they may need to be sold.

(e)A bond that matures in 10 years was purchased. The company is investing money set aside for an expansion project planned 10 years from now.

(f)Preferred stock was purchased for its constant dividend. The company is planning to hold the preferred stock for a long time.
Expert Answer

Answer 1

Answer:

Check the following clasifications

Explanation:

Question a). Answer :- Trading securities.

Question b). Answer :- None of the above.

Question c). Answer :- Trading securities.

Question d). Answer :- Available for sale securities.

Question e). Answer :- None of the above.

Question f). Answer :- Held to maturity securities.