Question

Which investment length would you classify AFS securities if the intent is to sell securities within one year or the normal operating cycle (whichever is longer)?

1) Short-term investments
2) Long-term investments
3) Intermediate-term investments
4) Cannot be determined

Answer 1

AFS securities would be classified as short-term investments if the intent is to sell them within one year or the normal operating cycle (whichever is longer).

Step-by-step explanation:

AFS securities would be classified as short-term investments if the intent is to sell them within one year or the normal operating cycle (whichever is longer). Short-term investments are typically held for a shorter duration and are more liquid compared to long-term investments. They include assets such as government savings bonds, money market mutual funds, and small certificates of deposit (CDs).