What was the value of an actively traded investment that cost $600,000 when it was valued at $525,000 at the end of Year 1?

The valuation of an actively traded investment is typically determined by its fair market value at the reporting date. In this scenario, the investment was originally purchased for $600,000 but had a market value of $525,000 at the end of Year 1. Since fair market value is the amount for which the asset could be bought or sold in an arm's-length transaction between willing parties, the value of the investment should reflect its market condition at the end of that period, which is indicated as $525,000. Consequently, the correct choice reflects the valuation that would be recognized on the balance sheet for the investment after one year. The decrease in value from its original cost indicates a potential impairment or a change in market conditions affecting the asset's worth.