Introduction to Investment: What is Investment?

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Questions and Answers

What is the essential element of investment?

  • Return (correct)
  • Consumption
  • Risk
  • Sacrifice

Which characteristic is inherent in any investment?

  • Risk (correct)
  • Yield
  • Return
  • Capital appreciation

What does investment involve?

  • Return and consumption
  • Capital appreciation and yield
  • Risk and sacrifice (correct)
  • Delay in repayment and non-payment of interest

What is the primary objective of making investments?

<p>Deriving a return (D)</p> Signup and view all the answers

What is the possibility of variation in the actual return known as?

<p>Risk (A)</p> Signup and view all the answers

What is investment defined as?

<p>Sacrifice made now to obtain a return in the future (D)</p> Signup and view all the answers

What is the primary concern of an investor?

<p>Maximizing return (B)</p> Signup and view all the answers

Which factor affects the risk of an investment based on the text?

<p>The nature of the investment (D)</p> Signup and view all the answers

What does the safety of an investment imply based on the text?

<p>Certainty of return without any loss of money or time (A)</p> Signup and view all the answers

What does the term 'liquidity' refer to in the context of investments?

<p>Marketability without loss of value and time (D)</p> Signup and view all the answers

What is the objective of an investor as stated in the text?

<p>Maximization of return (D)</p> Signup and view all the answers

What does it mean for an investment to be 'liquid'?

<p>Easily marketable without loss of value and time (D)</p> Signup and view all the answers

What is meant by 'minimization of risk' as per the text?

<p>Minimizing the probability that actual returns may be different from expected returns (D)</p> Signup and view all the answers

What does 'investor' mean based on the text?

<p>An individual or institution who commits money to investment products with expectation of financial return (D)</p> Signup and view all the answers

What do investors generally desire in terms of returns and risk?

<p>High returns with low risk (B)</p> Signup and view all the answers

What is the main reason why people invest according to the text?

<p>To earn a return from savings due to deferred consumption (D)</p> Signup and view all the answers

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