A weakness of is that firms can increase or decrease net income by choosing to sell particular investments with net unrealized holding gains or unrealized holding losses. the available-for-sale approach the trading-securities approach both the available-for-sale and trading-securities approaches neither the available-for-sale and trading-securities approaches

The correct answer is letter "A": the available-for-sale approach.

Explanation:

The Available-for-Sale Securities are debt or equity securities held indefinitely. Investors who purchase securities available-for-sale do not retain them until they mature. They have not managed actively.

Available-for-sale securities can be used for liability purposes or to sell to manage interest rate exposure, free-payment risk, and liquidity needs. They may represent a temporary investment in another business that gives shareholders a higher income.

A disadvantage of available-for-sale securities is that firms can sell them with net unrealized gains that could be losses as well.

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