Fixed-Income and Accrual Accounting for Securities | CFA Level 1 Exam Preparation

Fixed-Income and Accrual Accounting

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Question

According to the AIMR-PPS, ________ accounting must be used for fixed-income and all other securities that accrue income.

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Accrual accounting must be used for fixed-income and all other securities that accrue income. Accrued income must be included in the market value calculation of the denominator and the numerator. This is a requirement for calculation of returns.