finals in busfin

Question 1

The simplest form of investment.

Answer 1

bank fixed deposits (FD)

Question 2

is a financial instrument provided by banks which
provides investors with a higher rate of interest than a regular savings
account, until the given maturity date.

Answer 2

Fixed Deposit (FD)

Question 3

True or False FD may not have liquidity risk but premature redemption of FD may
subject to penalty on interest or no interest to be paid at all.

Answer 3

True

Question 4

Unlike FD, investing in the stock market requires certain knowledge especially investment in non-blue chips.

Answer 4

Stock Market

Question 5

is an unincorporated mutual fund structure that allows funds to hold assets and provide profits that go straight to individual unit owners instead of reinvesting them back into the fund.

Answer 5

Unit Trust Investment – Degree of Risk Varies

Question 6

were
traditionally the domain of institutions due to the size of investment.

Answer 6

bonds

Question 7

True or false A bond with longer maturity period or duration normally offers higher return

Answer 7

True

Question 8

is something that is purchased with money that is expected to produce income or profit.

Answer 8

Investment

Question 9

Investments can be classification into three basic groups:

Answer 9

1) Ownership
2) Lending
3) Cash equivalents

Question 10

are what come to mind for most people when the word “investment” is batted around.

Answer 10

Ownership investments

Question 11

are the most volatile and profitable class of investment.

Answer 11

Ownership investments

Question 12

are literally certificates that say you own a
portion of a company

Answer 12

Stocks

Question 13

The money put into starting and running a
business is an investment.

Answer 13

Business

Question 14

Houses, apartments or other dwellings that
you buy to rent out or repair and resell are investments.

Answer 14

Real Estate

Question 15

allow you to be the bank. They tend to be lower risk
than ownership investments and return less as a result.

Answer 15

Lending investments

Question 16

Even if you have nothing but a regular savings
account, you can call yourself an investor.

Answer 16

Savings account

Question 17

The risks and returns vary widely between the different
types of bonds, but overall, lending investments pose a lower risk and provide a lower return than ownership investments.

Answer 17

Bonds

Question 18

is a safe investment that carries such a low amount of risk that the outcome is virtually ensured.

Answer 18

cash equivalent

Question 19

may include several other financial instruments, like
checks or money orders that are awaiting deposit or redemption. Gift certificates also qualify.

Answer 19

cash equivalent