In U.S. GAAP, which of the following accurately describes the effects of transactions involving investments on the statement of cash flows using the fair value method for trading securities and fair value hedges?

a. Realized gains and losses appear in net income. Unrealized gains and losses appear in Other Comprehensive Income.
b. Realized gains and losses appear in Other Comprehensive Income. Unrealized gains and losses appear in net income.
c. Realized gains and losses appear in Retained Earnings. Unrealized gains and losses appear in Other Comprehensive Income.
d. Realized gains and losses appear in Retained Earnings. Unrealized gains and losses appear in net income.
e. Both realized and unrealized gains and losses appear in net income.

E