week 10 to 12 Flashcards
involves employment of funds
Investment
sacrifice of current money or other resources for
future benefits.
investment
nature of
investment;
Return
Inherent in any investment.
Risk
easily saleable or
marketable without loss of money and
without loss of time
Liquidity
enjoyed at the time of making
the investment.
Initial tax benefit
Represents the tax shield associated with the
periodic returns from the investment.
Continuing tax benefit
Relief from taxation when an investment is
realized or liquidate.
Terminal tax benefit
do not earn interest.
Current account
earns
interest.
Savings account
earn the
highest interest rate.
Time deposit account
It is not always
available for withdrawal.
Time deposit account
the amount
clients pay to the professionals who
manage their mutual funds.
Management fee
distribution of the
company’s income to its shareholders.
dividends
right to be heard on
certain policies that the company
wants to implement.
voting rights
ability to be converted into cash, the
higher the liquidity the better.
Liquidity
general increase in prices.
Inflation
investment that reduces the risk of adverse
price movement in an asset.
Hedge
risks of one country’s foreign
policy influencing or upsetting domestic, political and
social policy in another country or region.
Geopolitical risks
amount paid on a regular
basis to the insurance company in return for the
insurance/protection provided.
Insurance premiums
Is how you earn income and how the income
is spent.
Personal finance management
Are what you own
Assets
What you owe to others
Liabilities
What you earn
Income
What you spend money on
Expenditure
when income is greater
than expenses
Surplus
when expenses are greater than
income
Deficit
