5 Questions
Why is cash considered essential in an investment portfolio?
Cash is essential for liquidity needs and emergency funds.
What does liquidity refer to in the context of investments?
Liquidity refers to the ease with which an asset can be converted into cash quickly, reliably, and relatively cheaply.
How does holding excessive cash impact an investment portfolio?
Holding excessive cash can lead to negative real returns.
What is the Financial Services Compensation Scheme, and how does it benefit retail investors?
The Financial Services Compensation Scheme covers retail investors.
Why is it difficult to achieve positive real returns with cash investments?
Difficult to achieve positive real returns due to low-interest rates.
Learn about the significance of cash in an investment portfolio. Explore how cash provides liquidity for emergencies and unplanned expenses, along with its minimal risk and safety features. Understand the role of cash in meeting financial goals and managing uncertainties.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
