Investments Flashcards

1
Q

What are the 2 conditions that must exist if a HTM debt security is sold prior to maturity date and still be considered “HTM”?

A
  1. Sales are close to maturity date (within 3 months) that interest rate risk is eliminated as a pricing factor and would not impact fair value.
  2. Sale occurs after a substantial portion of the principal is collected (85% or more).
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