Investment Basics: Types and Returns
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Questions and Answers

What is a characteristic of alternative investments?

  • Somewhat not easily converted to cash or illiquid (correct)
  • Easy to convert to cash
  • High liquidity
  • High market volatility
  • What is a key difference between mutual funds and Unit Investment Trust Funds (UITF)?

  • UITF is only offered by banks, while mutual funds are not
  • Mutual funds have management fees, while UITF does not (correct)
  • Mutual funds are only offered by investment companies, while UITF is not
  • UITF has management fees, while mutual funds do not
  • What is the primary purpose of an insurance policy?

  • To participate in a blockchain transaction
  • To earn dividends from a company
  • To hedge against the risk of financial losses (correct)
  • To invest in commodities
  • What is a characteristic of real estate investments?

    <p>Limited liquidity and high capital intensity</p> Signup and view all the answers

    What is the technology used by cryptocurrencies to manage and record transactions?

    <p>Blockchain</p> Signup and view all the answers

    What is the definition of commodities?

    <p>Basic goods used in commerce that is interchangeable with other commodities of the same type</p> Signup and view all the answers

    What is the primary goal of allocating money in an investment?

    <p>To generate income or appreciation</p> Signup and view all the answers

    What is the term for an increase in the value of an asset over time?

    <p>Appreciation</p> Signup and view all the answers

    Which type of investment involves buying shares in a particular company?

    <p>Equity</p> Signup and view all the answers

    What determines the interest rates offered by fixed income securities?

    <p>The solvency of the borrower and current interest rates</p> Signup and view all the answers

    What is the term for a financial asset that does not fall into one of the conventional equities, income, or cash categories?

    <p>Alternative investment</p> Signup and view all the answers

    What are the three main categories of investments?

    <p>Income and equities, alternatives, and other investment assets</p> Signup and view all the answers

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