Which of the Following Is True About Passive Investments

Multiple Choice

Which of the following is true about passive investments?

A) The investing company usually owns less than 20% of the voting stock in the investee and they are reported on the balance sheet at cost.
B) These investments must not have any voting rights.
C) The market value method requires realized gains and losses to be recognized on the income.
D) The investing company must usually own less than 20% of the voting stock in the investee and these investments must be reported at market value on the balance sheet even though the historical cost principal is violated.