Multiple Choice
Which type of bonds typically offer a higher yield to investors, all else being equal?
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7. Receivables and Investments
Introduction to Investments in Securities
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is an example of an investment in securities?
A
Buying office supplies for daily use
B
Repaying a bank loan
C
Paying employee salaries
D
Purchasing shares of common stock in a publicly traded company
Verified step by step guidance1
Understand the concept of 'investment in securities': Investments in securities refer to the purchase of financial instruments such as stocks, bonds, or other marketable securities with the intention of earning a return or holding them as assets.
Analyze the options provided: Evaluate each option to determine whether it involves the purchase of a financial instrument or security.
Option 1: Buying office supplies for daily use - This is an operational expense and not related to investments in securities.
Option 2: Repaying a bank loan - This is a financing activity and involves settling a liability, not an investment in securities.
Option 3: Purchasing shares of common stock in a publicly traded company - This involves buying a financial instrument (common stock), which qualifies as an investment in securities.
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