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3-11. BA FM33P > Lesson 1: Investment Setting > Flashcards

Lesson 1: Investment Setting Flashcards

1
Q

Is both a science and an art of correct application of the economic and accounting concepts and principles that define the system structure and process of management allocation and utilization of financial resources investments and expnditures.

A

Finance

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2
Q

Giving up immediate consumption of excess earnings or savings for a future larger amount of money that will be available for future consumption.

A

Investment

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3
Q

Trade-off of present consumption for a higher level of future consumption.

A

Investment

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4
Q

It is a broad field that encompasses the management of resources within an organization or for an individual.

A

Finance

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5
Q

Deals with money management, including budgeting, financial planning, risk management, and financial decision-making.

A

Finance

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6
Q

It is a broader field that deals with the overall management of financial resources.

A

Finance

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7
Q

Specifically refers to the allocation of money or capital for the expectation of generating future income or profit.

A

Investment

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8
Q

It includes purchasing assets in the hope that they will appreciate value or generate more wealth over time.

A

Investment

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9
Q

It is a specific subset of finance that involves allocating capital with the expectation of earning a return on that capital over time.

A

Investment

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10
Q

The current commitment of investment

A
  1. The time the funds are committed
  2. the expected inflation rate during this period
  3. the uncertainty of future payments
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11
Q

Funds invested in tangible and productive assets such as machines, land, or plant

A

Real Investment

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12
Q

The productive capacity of the economy

A

Real Investment

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13
Q

Funds invested in paper or electronic contracts such as stocks and bonds

A

Financial Investment

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14
Q

Means by which individuals in wel developed economies hold their claims on real assets

A

Financial Investment

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15
Q

Advantages of Investing in Financial Assets

A

1.Divisibility
2. Marketability or Liquidity
3. Shorter holding period
4. Information availability

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16
Q

People who are investing on their own.

A

Individual Investors

17
Q

May be referred as retail Investors

A

Individual investors

18
Q

Legal entities that pool resources to purchase securities and other investment

A

Institutional Investors

19
Q

Trade securities in large quantities

A

Institutional InvestorsB

20
Q

Buying or selling financial instruments through financial markets

A

Direct Investing

21
Q

Buying or selling financial instruments through financial intermediaries

A

Indirect Investing

22
Q

Has Control; Can decide when to buy/sell

A

Direct Investing

23
Q

Professionally managed; Allow small investors to invest; Allow investors to own diversified pools of risks and returns

A

Indirect Investment

24
Q

Common types of financial investment vehicles

A

a. Short-term investment vehicles
b. Fixed-Income securities
c. Common Stock
d. Speculative Investment Vehicle

25
Q

Known as money market instruments

A

Short-term Investment Vehicles

26
Q

Matures in a year or less

A

Short-term Investment Vehicles

27
Q

Can be liquidated to cash quickly

A

Short-term Investment Vehicles

28
Q

Examples of Short-term Investment Vehicles

A
  • Certificate of deposits
  • Treasury bills
  • Commercial paper
29
Q

Long term investment

A

Fixed Income Security

30
Q

Known as Capital Market Instruments

A

Fixed Income Security

31
Q

Return is fixed over a certain period of time

A

Fixed Income Security

32
Q

Examples of Fixed Income Security

A

a. Preferred stock
b. Long-term debt securities (bonds)

33
Q

Debt instrument issued by the government that matures longer than a year

A

Treasury notes/bonds

34
Q

longer term debt instruments. A means by which private institutions borrow money from the public.

A

Corporate Bonds

35
Q

Examples of Long term debt securities (bonds)

A
  • secured bonds
  • unsecured bonds (debentures)
  • callable bonds
  • convertible bonds
36
Q

Are Common stocks

A

Equity Securities

37
Q

Ownership share in a corporation

A

Equity Securities

38
Q

Has a residual claim and a limited liability feature

A

Equity Securities

39
Q
A

3-11. BA FM33P (3 decks)

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