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Investment and Portfolio Management > Investment Concepts to Risk and Return > Flashcards

Investment Concepts to Risk and Return Flashcards

1
Q

Investor who is willing to accept equal levels of expected return for higher levels of risk.

A

RISK-NEUTRAL INVESTORS

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2
Q

Investors willing to accept lower levels of expected returns for higher levels of risk.

A

RISK-TAKER INVESTORS

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3
Q
  • investors who select a portfolio that maximizes expected return for any given level of risk or;
  • investors that minimize risk for any given level of expected return.
A

RISK-AVERSE INVESTORS

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4
Q

The aggregate of assets held as investments

A

INVESTMENT PORTFOLIO

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5
Q

How investible funds are allocated between the different investment items.

A

INVESTMENT MIX

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6
Q

Amount of cash that an entity must have to take care of unexpected cash requirements

A

LIQUIDITY BUFFER

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7
Q

Amount of money that an entity can afford to invest for a definite period without hampering his day-to-day operations

A

INVESTABLE CASH

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8
Q
  • assets acquired to realize income
  • expected to increase one’s equity
  • expected to reduce future financial worries
  • sacrifice of some current pleasures with hope that resources acquired will enhance the future
A

INVESTMENT

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9
Q

Investment which entails more risks but bigger rewards.

A

OFFENSIVE INVESTMENT

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10
Q

Investment which entails less risks but smaller rewards.

A

DEFENSIVE INVESTMENT

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11
Q

Person or office given the authority to make decisions regarding the investments of an entity.

A

PORTFOLIO MANAGER

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12
Q

Reasons for Investing: INCOME

A

to provide or supplement their income.

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13
Q

Reasons for Investing: APPRECIATION

A

to increase the value of an investment.

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14
Q

Reasons for Investing: EXCITEMENT

A

investing is frequently someone’s hobby.

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15
Q

Reasons for Investing: FINANCIAL LIMITATIONS

A

play it safe by putting money in fixed income and low-risk financial instruments.

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16
Q

Reasons for Investing: TIME HORIZON

A

When the time horizon is short, the less risky investment vehicles should be chosen.

17
Q

Reasons for Investing: MARKET TIMING

A

One should get in and out of the market at the most opportune time.

18
Q

Represents ownership interest in an issuing corporation.

A

EQUITY SECURITIES

19
Q

Obligations that mature in one year or less.

A

SHORT-TERM DEBT SECURITIES

20
Q

Obligations that mature in more than one year.

A

INTERMEDIATE AND LONG-TERM DEBT SECURITIES

21
Q

Securities that have characteristics of both equity and debt.

A

HYBRID SECURITIES

22
Q

Securities that derive their value from the value of an underlying asset.

A

DERIVATIVE SECURITIES

23
Q

Non-financial assets

A

REAL ASSETS

24
Q

Investments by individuals in debt or equity securities issued by an organization outside the country of residence of the investor.

A

INTERNATIONAL INVESTMENTS

25
Q

Includes (1)Ordinary Shares; (2)Preferred Shares

A

EQUITY SECURITIES

26
Q

Includes (1)Negotiable certificates of deposit; (2)Commercial papers; (3)Banker’s acceptances; (4) Treasury bills

A

SHORT-TERM DEBT SECURITIES

27
Q

Includes Philippine government securities like (1)Treasury notes; (2)Treasury bonds

A

INTERMEDIATE AND LONG-TERM DEBT SECURITIES

28
Q

Includes (1)Convertible preferred stock; (2)Convertible bonds

A

HYBRID SECURITIES

29
Q

Includes (1)Convertible preferred stock; (2)Convertible bonds

A

HYBRID SECURITIES

30
Q

Includes (1)Options; (2)Commodity futures; (3)Financial futures; (4)Options on futures; (5)Rights; (6)Warrants

A

DERIVATIVE SECURITIES

31
Q

Includes (1)Precious metals; (2)Real estate; (3)Collectibles

A

REAL ASSETS

32
Q

Includes (1)Multinational corporations; (2)Foreign shares traded on a local exchange; (3)Foreign currencies

A

INTERNATIONAL INVESTMENTS

33
Q

Public or private investment funds that provide retirement and other benefits to eligible employees. (not marketable)

A

Pension funds

34
Q

Investment companies that sell shares of ordinary share that represent an ownership interest in a portfolio of domestic and/or foreign securities (OTC market and direct transaction with individual funds)

A

Mutual funds

Investment and Portfolio Management (10 decks)

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