Week 5: Investments

Question 1

Asset Class

Answer 1

Describes a group of investments that exhibit similar characteristics

Examples:

• Equities
• Bonds
• Savings Accounts
• Property
• Alternative investments

Question 2

Shares

Answer 2

Gives holders a share of the ownership of the company in which they are held

Question 3

Dividends

Answer 3

Company profits to reward shareholders for investing in the company.

Question 4

Stock Exchange

Answer 4

A marker where investments, principally company shares can be bought and sold

Question 5

Bonds

Answer 5

Long-term loan contracts that can be issued by companies or government

Question 6

Nominal value

Answer 6

Base value of an investment and remains fixed

Question 7

Credit rating

Answer 7

Measures riskiness of debt of a specific organisation

• The better the credit rating, the more likely it is that interest payments and capital payments will be made when due

Question 8

Gilts

Answer 8

UK government bonds issued at a declared rate of interest in order to raise money for government spending

Question 9

Collective investments

Answer 9

Use funds provided by a large number of investors to invest in a wide range of investments that may be spread across asset classes