Question

Characteristics that support classification of investments as trading securities include (Select all that apply.) frequent and...

Characteristics that support classification of investments as trading securities include (Select all that apply.)

frequent and active trading.

long-term appreciation of value.

motivation to realize short-term profits.

long-term reduction in investment risk.

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Answer #1

Characteristics that supports classification of investments as trading securities include:-

Trading securities are securities that a company purchases/acquires with the intention of selling them in the near future or for a short term for profit. Based on the questions and options available:-

Option A - Frequent and active trading & Option C - Motivation to realize short term profits is the correct answer. These features are true about the characteristics of trading securities and hence is the correct answer.

Option B - Long term appreciation of value is incorrect because trading securities are focussed on short term goals as against the long term goals.

Option D is incorrect because the goal of long term reduction in investment risk is not a characteristic of trading securities and hence is incorrect.

Please let me know if you have any questions via comments and all the best :)

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