CFA Practice Question

There are 534 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 3

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.
mauiecells The correct answer letter b. does not match with the explanation. In other words, the explanation is opposite of the correct answer.
jpducros maulecells , the question states "NOT normally be classified"
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