I wold really appreciate it if someone can explain this to me? Q14: Question asks for impact on income for Portfolio B if investment is reclassified from Held to Maturity to A-F-S. The explanation says no gains to be reported so I guess it’s D ($0) In the explanation, it says that for A-F-S securities, Interest would be included and only realized gains. So there were negative realized gains “Loss” so it won’t be reported. But what about the Dividends of $3 for Cortez and $2 for Da Gamma, shouldn’t they be included? I know there is no answer for $5 ( 2+3) but i still don’t get it. Q.15:Do we not M-T-M for securities that we have significant influence over? The left out Columbus and De Soto from the calculation. Thanks in advance
For Q15, unrealized gains go into Comp. Income when transferred from HTM to AVS. There were no realized gains/loses so nothing effects the I/S and the interest was already there.
Thanks Nib Anyone else can help me out ?