Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

In which of the following situations would purchasing a savings bond be the best investment to earn interest?

When you are seeking high returns in a short period through stock trading

When you want to invest in assets with variable interest rates and potential for capital gains

When you need immediate access to your funds for daily expenses

When you want a low-risk investment with guaranteed interest over a fixed period

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Verified step by step guidance

Understand the nature of a savings bond: A savings bond is a low-risk investment issued by the government, offering guaranteed interest over a fixed period. It is ideal for individuals seeking stability and security in their investments.

Analyze the options provided: Evaluate each scenario to determine whether it aligns with the characteristics of a savings bond. For example, high returns in a short period through stock trading involves significant risk and volatility, which is contrary to the low-risk nature of savings bonds.

Consider the variable interest rates and potential for capital gains: Investments with variable interest rates and capital gains, such as stocks or mutual funds, are not guaranteed and carry higher risk compared to savings bonds.

Evaluate the need for immediate access to funds: Savings bonds typically have a fixed maturity period, meaning they are not suitable for individuals who require liquidity for daily expenses.

Conclude that the best situation for purchasing a savings bond is when you want a low-risk investment with guaranteed interest over a fixed period, as this aligns perfectly with the characteristics of savings bonds.