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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?

Limited liquidity and high capital intensity (C) Signup and view all the answers

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

Blockchain (D) Signup and view all the answers

What is the definition of commodities?

Basic goods used in commerce that is interchangeable with other commodities of the same type (A) Signup and view all the answers

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

To generate income or appreciation (D) Signup and view all the answers

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

Appreciation (C) Signup and view all the answers

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

Equity (B) Signup and view all the answers

What determines the interest rates offered by fixed income securities?

The solvency of the borrower and current interest rates (C) 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?

Alternative investment (B) Signup and view all the answers

What are the three main categories of investments?

Income and equities, alternatives, and other investment assets (A) Signup and view all the answers