Investment Flashcards
Application of money to earn more money
Investment
Refers to utilization of resources in order to increase income or production output in the future
Investment in Economics
Refers to any physical or tangible asset
Investment for economists
Money utilized for buying financial assets
Investment for Finance professionals
Most important feature of investment
High Market Liquidity
Method used for evaluating the value of a financial investment
Valuation
Types of Investments
- Economic
- Financial
Undertaken with the expectation of increasing the current economy’s capital stock which consists of goods and services desired by the society
Economic Investment
Money invested in financial investments is ultimately converted into physical assets
Financial Investments
Reflect the progress pattern of the real market, financial market exist only as a support to the real market.
Perfect Financial Market
Putting money into something with an expectation of gain without thorough analysis, without security of principal and without security of return.
Speculation/ Gambling
Nature of Investment
- Return
- Risk
- Safety
- Liquidity
Money made or lost on an investment over some period of time.
Return
Primary Objective of an investment
Return
Return may be received in what form?
Yield (Dividend/Interest) + Capital Appreciation (Sale Price– Purchase Price)
Return depends on what?
- Nature of Investment
- Maturity Period
- Host of other factors