Securities Flashcards
1
Q
What are the three classifications of securities
A
Held to Maturity (HTM)
Trading Securities
Available for Sale (AFS)
2
Q
What are Held-to-Maturity securities
A
Securities you plan on holding until maturity. Bonds
Valued at PV | Discounted future cash flows
3
Q
What are trading securities
A
Securities you plan to sell in the short term. Recognize unrealized gain/loss through income statement
4
Q
What are available-for-sale securities
A
Securities you don’t plan to sell in the short term or hold until maturity.
Recognize gain/loss to OCI
5
Q
What happens when you transfer AFS securities to Trading and vice versa
A
Trading -> AFS new gain/losses go into OCI and gains/losses beforehand still flow through I/S
AFS -> Trading recognize all unrealized gains/losses in I/S
