CA1 Revision

Question 1

List the characteristics of an asset to understand suitability of investing in it.
(#SYSTEM T)

Answer 1

Seven asset characteristics to consider:
(#SYSTEM T)

S: Security or credit risk
Y: Yield or return achieved
S: Spread or how it diversifies a portfolio
T: Term of the asset
E: Expenses/Expertise/Exchange Rate
- Expenses of investing in it;
- Expertise required;
- Exchange rate risk;
M: Marketability of the investment (and hence liquidity)

T: Tax Implications