SAPM B.COM 6th Q1

What is the primary meaning of investment?

• The allocation of resources with the expectation of generating income or profit.

• A way to spend money without expecting returns.

• The process of buying and selling stocks only.

• A method of saving money for future use.

Describe the nature of investment.

• Investment is solely about saving money for future use.

• Investment involves only buying physical assets like real estate.

• Investment is the allocation of resources with the expectation of generating income or profit.

• Investment guarantees a return without any risk.

What are the main objectives of investing?

• The main objectives of investing are capital appreciation, income generation, and risk management.

• Focusing solely on short-term gains

• Avoiding all forms of risk

• Maximizing debt levels

Outline the general process of making an investment.

• The general process of making an investment includes defining goals, researching options, analyzing investments, deciding on the amount, executing the purchase, monitoring performance, and making adjustments.

• Investing only in stocks without research

• Ignoring market trends and performance

• Buying investments based on friends' advice

How does investment differ from speculation?

• Investment guarantees high returns, while speculation is always a loss.

• Speculation is a safer approach compared to investment.

• Investment involves frequent trading, whereas speculation is a buy-and-hold strategy.

• Investment is based on long-term value and returns, while speculation focuses on short-term price movements and higher risks.

In what ways is investment different from gambling?

• Investment is based on analysis and potential returns, while gambling is based on chance and luck.

• Investment is a form of entertainment, whereas gambling is a serious financial strategy.

• Gambling requires extensive research, while investment is purely luck-based.

• Investment guarantees returns, while gambling does not.

List some common investment avenues or alternatives.

• savings accounts

• Stocks, bonds, mutual funds, real estate, commodities

• insurance policies

• credit cards

What is investment philosophy?

• Investment philosophy is solely based on market trends.

• Investment philosophy is a type of financial product.

• Investment philosophy refers to the physical location of investments.

• Investment philosophy is a framework of beliefs guiding investment decisions.

Explain the concept of value investing.

• Value investing involves trading stocks frequently to maximize short-term gains.

• Value investing focuses on buying stocks based on market trends rather than fundamentals.

• Value investing is about investing in high-risk stocks for quick profits.

• Value investing is an investment strategy focused on buying undervalued stocks with strong fundamentals.

What is growth investing and how does it differ from value investing?

• Growth investing targets companies with high growth potential, while value investing seeks undervalued stocks.

• Growth investing seeks undervalued stocks with low risk.

• Value investing targets companies with high growth potential.

• Growth investing focuses on dividend-paying stocks.