Investment Flashcards
Define invest?
To expend (money, effort) in something from which a return or profit is expected
What is interest compensation for?
For differing the full benefit of spending the money now
Characteristics of investment
Security of capital Security of income Interest Capital growth Liquidity Divisibility Real security
What is security of capital?
How great is the likelihood that you will be able to get your money back at any particular time
What is security of income?
How certain are you that payments will be made by the person/ organisation that is using your money
What can differ with interest
The amount you receive and how frequently
What is capital growth?
The asset prices going up
What is liquidity?
How easy is it to buy and sell the investment
What makes an investment easy to buy and sell?
If transactions take little time, effort and expense
What is divisibility?
What is the smallest unit of the investment that can be traded
What is real security?
That whether the capital value will keep up with inflation
What 3 financial charecteristics is investment made up of?
Capital value or price
Income or interest
Rate of return
What are the different investment markets?
General investment
Property investment
Company share
Bank account
What is capital value called in the different investment makerkets
General and property- Capital value
Company shares-
Share price
Bank account-
Principal
What is income called across the different investment markets?
General-
Income
Property-
Rent
Company share-
Dividend
Bank account-
Interest
