FIN333 : CHAPTER INVESTING AND GROWING FINANCIAL ASSETS

What is the most liquid and low risk investment vehicles mentioned in Malaysia?

• Cash and fixed deposits

• Government Bonds

• Mutual Funds

• Equities (Common Stock)

What is the key difference between mutual funds and exchange traded funds?

• Mutual funds are open ended, while ETFs are closed ended

• Mutual funds are always riskier than ETFs

• ETFs are regulated by the Securities Commission Malaysia but mutual funds are not

• Mutual funds have higher liquidity compared to ETFs

Why are corporate bonds considered riskier than government bond?

• Because they have lower interest rates

• Because they have longer maturity periods

• Because they are not backed by any organization

• Because they depend on the creditworthiness of the issuing company

What is the main purpose of FOREX?

• To invest in stocks and bonds

• To buy and sell currencies of different countries

• To invest in real estate

• To raise funds for business operations

What are the disadvantages of investing in cryptocurrency and digital assets mentioned in the text?

• They can involve high risk

• They can incur high transaction costs

• They can provide anonymity and privacy

• They can offer innovation and creativity potential

What is the primary function of a real estate investment trust (REITS)?

• To operate income-generating properties

• To distribute income to shareholders

• To speculate on currency exchange rates

• To invest in cryptocurrency

Which steps in effective investment planning involves determining your willingness and capacity to take risks with your investment?

• Define your goals and objectives

• Assess your risk tolerance

• Determine your time horizon

• Build a diversified portfolio

What does a diversified portfolio primarily aim to achieve?

• Maximize returns

• Minimize risks

• Eliminate risks

• Maximize short term gains

Which step in effective investment planning involves spreading investments accross different asset classes like stocks, bonds, and real estate?

• Define your goals and objectives

• Assess your risk tolerance

• Determine your time horizon

• Build a diversified portfolio

Which step in effective investment planning involves periodically reviewing and adjusting your investment plan?

• Monitor and review your investments

• Assess your risk tolerance

• Determine your time horizon

• Build a diversified portfolio