EBK ADVANCED FINANCIAL ACCOUNTING
EBK ADVANCED FINANCIAL ACCOUNTING
12th Edition
ISBN: 9781260165104
Author: Christensen
Publisher: YUZU
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Chapter 14, Problem 14.2.1E
To determine

Introduction: Securities Act of 1993 which is passed in 1993 for security exchange works with the motive to secure the investors so that they can get financial and other important information related to securities issued in public sale and also to have a check on activities like fraud, misrepresentation, etc.

To choose: The correct answer.

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1.In accordance with CFA standard V(B), in preparing a research report involving securities, the members and candidates must:A.present the basis characteristics(general principles of the investment of the investment process used-such as risk and return related issues) B.Include all factors that are relevant including any significant limitations and risks associated with the investment and/or decision-making process. C.All the options listed. D.Provide regular updates to any important changes to the securities(prices, risks.etc) 2. In accordance with CFA standard VI(A), a member must: A.Disclose all actual and perceived conflicts of interest when it is convenient to ensure no loss of income. B.Use their professional judgement and disclose conflicts of interest if the monetary value exceeds 300. C.Disclose all actual and perceived conflicts of interest before assisting the client or employer. D.Use their professional judgement and only disclose actual conflicts of interest.
For hedge accounting to be used, U.S. GAAP requires that these criteria must be satisfied, except: O a. The effectiveness of eliminating a specific market risk is documented. O b. A description of the hedging strategy is provided. O c. The derivative is designated as a hedging instrument. O d. A net gain results from hedging a specific risk.
According to AC Topic 320, 'Investments - Debt and Equity Securities', all of the following changes in circumstances may cause an entity to change its intent to hold a certain security to maturity without calling into question its intent to hold other debt securities to maturity in the future, EXCEPT for: O a. Evidence of a significant deterioration in the issuer's creditworthiness O b. Changes in market interest rates and related changes in the security's prepayment risk Oc. A change in tax law that eliminates or reduces the tax-exempt status of interest on the debt security O d. A major business combination or major disposition that necessitates the sale or transfer of held-to-maturity securities to maintain the entity's existing interest rate risk position or credit risk policy
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