Chapter 4 : Managing Investment

What is Investment?

• Commercial or government activity of managing money, debt, credit and investment

• A person or an organisation that buys shares or pays money into a bank in order to receive a profit

• Present commitment of money for the purpose of receiving more money later – invest amount of money then your capital will increase

• The purchase of a financial product or other item of value with an expectation of favorable future returns.

Choose the CORRECT investment decisions.

• Retirement & Estate Planning

• Liquidity Management

• Financing

• Financing Planning Tools

Stocks, Bonds and Mutual Funds included under Investing choice. True or False?

• True

• False

What is the 1st process of investment management ?

• Portfolio Construction

• Portfolio Evaluation and Revision

• Conduct security analysis

• Set Investment policy

What is the last process of investment management ?

• Portfolio Construction

• Portfolio Evaluation and Revision

• Conduct security analysis

• Set Investment policy

"....to be the present worth to the owners of future benefits from investments..." This statement shows the process of valuation of securities? True or False?

• True

• False

"...to determine future risk and return in holding various blends of individual securities..." This statement shows the process of valuation of securities? True or False?

• True

• False

The primary objective of investment is to decrease the rate of return and to reduce the risk. True or False?

• True

• False

- Investors should balance their investment programs to fight against any purchasing power instability.

- Any rational investor knows that money is losing its value by the extent of rise in prices.

The statements above refers to .....?

• Regularity and stability of income

• Stability of purchasing power

• Capital appreciation

• Tax benefits

What are bonds in the context of financial management?

• Shares in a company's equity

• Loans from investors to the issuer that must be repaid

• An exchange of goods and services

• A type of digital currency