Investment Forms

Question 1

Advantages of cash investments

Answer 1

Low-risk
Cash at call

Question 2

Disadvantages of cash investmnets

Answer 2

Low return
Low interets rates
No capital growth
Subject to income tax
Value reduced by inflation

Question 3

Advantages of Term deposits

Answer 3

Protected by government guarentee ($250,000)
Relatively secure
Low risk
Locking in (good for saving)
Interets slightly higher than cash investment

Question 4

Disadvantages of term deposit

Answer 4

Low return
Locked in for set time period
No capital growth
Interest subject to tax
Reduced value due to inflation

Question 5

Advantges of property

Answer 5

Capital growth
Income generation
Property prices ahead of inflation
Claim tax deduction on investment property

Question 6

Disadvantages of property

Answer 6

Maintence
Moderate risk
No tennant, damage
Can mean significant debt
Can take a while to sell
Usually less liquid investment than cash
Subject to capital gains tax

Question 7

Advantages of shares

Answer 7

High rewards
Can receive dividends
Very liquid
Capital growth
Highest performing asset in long-term

Question 8

Disadvantages of shares

Answer 8

High risk because of volatility
Subject to capital gains tax when sold