Locate Microsoft’s 2008 annual report at www.microsoft.com to answer the following questions:
1. Find Microsoft’s note on accounting policies. Using the information in that note (under the heading “Financial Instruments”), determine what fraction of Microsoft’s investment securities are classified as “available-for-sale.”
2. In its note on “Investments,” Microsoft lists the general types of investments that make up its $30.250 billion portfolio. Certificates of deposit are listed both as “cash and cash equivalents’’ and as “short-term investments.” What would you expect the difference between these two categories to be?
3. Look at Microsoft’s stockholders’ equity statement. Where in the equity section does Microsoft report the unrealized gains and losses from available-for-sale securities?