Investment Portfolio Management Chapter 1

Income Minus Expenditure equals

• Savings

• Investment

• Surplus

• Deficit

When money is committed to another person for a period of time for earning higher returns, it is called

• Savings

• Investment

• Surplus

• Deficit

An Investment earns an income. This income is called return. The return is a compensation for all of the following. Choose 3

• The time period for which funds are committed. Longer the time period, higher the return

• the amount of inflation

• safety of funds

• Uncertainty of future payment

Choose all the qualities of real assets. ( Choose 3)

• They are generally tangible

• They appear as liabilities

• They are depreciated

• They can be used to produce other assets

• They are financial contracts

Identify all the characteristics of financial assets. Choose 3

• They are tangible

• They are financial contracts

• They are claims on real assets

• They are extinguished when they are repaid

• They produce other goods

Identify all real assets ( Choose 3)

• Machines

• Bonds

• Shares

• Goodwill

• Furniture

Investors hand over money to .......... , who hand over shares and bonds to investors. ( Choose one , best answer)

• Borrowers

• Investors

• Issuers

• Institutions

Who are institutional investors in Financial assets? ( Choose 3)

• Investment Companies

• Government

• Commercial Banks

• Householders

• Insurance Companies

Financial assets perform many functions in the economy. Choose three

• Production role

• Informational Role

• Allocation of Risk

• Separation of ownership and management

• disruption of economy

Financial Assets perform many roles. One of them is to postpone the time when funds can be used. This role is called.....( Choose one)

• Informational role

• Allocation of risk

• Alteration of Consumption timing

• Separation of ownership and management