Marketable Securities

CFA Level II
#1

Can someone please clarify the term “marketable securities”? From what I understand, “marketable securities” includes all trading securities and those available-for-sale securities and held-to-maturity securities that have a maturity of less than 1 year. Is this correct? Thanks,

#2

By “marketable securities” do you mean securities for which there is a open market where they trade?

#3

Guys, I’m sorry to bother with this very simple term, but it’s really messing me up. Any suggestions?

#4

In a couple of questions in Schweser they use marketable securities in the BS… initially I thought it meant only trading securities… but now I realize they this line item might include trading and available for sale… or anything that matures in one year… tried to look it up in the notes, but couldn’t find a clarification…

#5

it’s every security with a market price. Even if derived from a model. The question will always mention it, though.

#6

thanks. I guess you’re right–the question should describe which classification in particular.

#7

dose it include common stock? in some CFAI mock exam, it ask quick/current ratio under temporal and current method . I am wondering how common stock fit in , as it will be translated different under current method. thanks. nattyg Wrote: ------------------------------------------------------- > thanks. I guess you’re right–the question should > describe which classification in particular.

#8

hw0799 Wrote: ------------------------------------------------------- > dose it include common stock? > > in some CFAI mock exam, it ask quick/current ratio > under temporal and current method . > > I am wondering how common stock fit in , as it > will be translated different under current method. > thanks. > > nattyg Wrote: > -------------------------------------------------- > ----- > > thanks. I guess you’re right–the question > should > > describe which classification in particular. A Marketable Security should be any security that is publicly traded on a Stock Exchange, Bourse, OTC market etc…usually there are many shareholders, buys/sells and % ownership are public information a non marketable security would usually be a privately held company where there are few shareholders and trades (buys sells) do not have to be disclosed (other than to the taxman)

#9

Aren’t marketable securities current monetary assets? So for translation/remeasurement they’d both be at the current rate?

#10

kbakes is right. marketable securities are generally a proxy for cash (like t-bills)…ie easily liquidated securities (so likely maturities of less than one year). i don’t think we will get into a situation where you are trying to determine specific classes of trading/AVS/HTM as a subset of marketable securities though. note that HTM would almost definitely appear in a line called “investments” (or something similar) on the B/S. trading and AVS could appear in marketable securities but i would think would likely be classified as investments as well.