Investment Decisions: Objectives and Overview

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Questions and Answers

What is the underlying objective of portfolio management?

  • Create a balance between returns and risk (correct)
  • Ignore risk and focus solely on returns
  • Minimize returns with high risk
  • Maximize risk without considering returns

Which type of investments could include houses, land, or commodities?

  • Financial assets
  • Mutual funds
  • Real assets (correct)
  • Stocks and bonds

What is the primary reason for savings in an economy according to the text?

  • To eliminate the need for investment decisions
  • To increase consumption requirements
  • To support deferred consumption and invest for future returns (correct)
  • To invest in financial assets alone

What is the main focus of professional asset management as mentioned in the text?

<p>Optimally managing the financial portfolio (A)</p> Signup and view all the answers

How does the text describe the relationship between returns and risk in investments?

<p>Higher returns usually accompany higher risk (B)</p> Signup and view all the answers

Which group of investors is typically characterized by investing for themselves?

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

What is a key determinant of the investing styles and strategies followed by different investor classes?

<p>Risk appetites and return requirements (C)</p> Signup and view all the answers

In which age group would an individual in India most likely be planning for post-retirement life?

<p>45-55 years (B)</p> Signup and view all the answers

Which type of investors comprise the largest active group in the financial markets?

<p>Institutional investors (C)</p> Signup and view all the answers

What are some examples of institutions mentioned as institutional investors in the text?

<p>Endowment funds and private equity firms (C)</p> Signup and view all the answers

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