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Questions and Answers
Which of the following best describes investment?
What is the purpose of investment?
What is the likelihood associated with risk in investments?
Which category of investment includes debentures and bonds?
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What distinguishes variable income investments such as equities and real estate?
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Fixed income investments always provide a fixed return annually
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Variable income investments, such as equities and real estate, do not appreciate in value in the long term
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Investment is the purchase of goods aimed at earning income in the present
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Investments in government securities are associated with high risk
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The purpose of investment is to make money work for you or let your money grow
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Study Notes
Investment Basics
- Investment is the act of putting money into something with the expectation of earning a profit or income.
Purpose of Investment
- The primary purpose of investment is to make money work for you or let your money grow.
Risk in Investments
- Risk in investments is associated with uncertainty, and the likelihood of loss or gain is unknown.
Types of Investments
- Debt investments include debentures and bonds, which offer a fixed return.
- Variable income investments, such as equities and real estate, have a potential for growth in value over time.
Characteristics of Fixed and Variable Income Investments
- Fixed income investments provide a fixed return annually, such as bonds and debentures.
- Variable income investments do not offer a fixed return, but have the potential for long-term growth in value, for example, equities and real estate.
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Description
Test your knowledge of investment definitions with this quiz. Learn about the various meanings and purposes of investment in financial terms.