CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

Which of the following investments in debt securities would not normally be classified as long-term?
A. Available-for-sale securities.
B. Trading securities.
C. Held-to-maturity securities.
Explanation: Only held-to-maturity and available-for-sale securities are potential non-current investments. Trading securities are always considered to be current in nature, whereas held-to-maturity and available-for-sale securities may be classified as long-term should their maturity, or management's intent dictate.

User Contributed Comments 1

User Comment
coolpuneet Classification of debt securities is not determined based on management's intent of trading or holding them till maturity. Classification between LT/ST depends on the maurity of the secrity. A bnd maturing in 10 years held for trading purpose is a ST security.

The question here seems vague since "normally" depends on the type of institution. There is a big difference betweeen a hedge fund vs bank balance sheet especially when it comes to fixed income arbitrage funds. However the trading securities would be classified as short term in either case.
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