Investment Management
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Questions and Answers

Which one of the following accurately describes a real investment/asset?

  • It is intangible and does not contribute to the productive capacity of the economy.
  • It can be tangible or intangible and is used to produce goods and services. (correct)
  • It is a 'paper' contract that claims to the income generated by real assets.
  • It is a financial asset that directly contributes to the productive capacity of the economy.

    • Which one of the following accurately describes a financial investment/asset?

  • It is a 'paper' contract that claims to the income generated by real assets. (correct)
  • It can be tangible or intangible and is used to produce goods and services.
  • It is tangible and directly contributes to the productive capacity of the economy.
  • It is intangible and does not contribute to the productive capacity of the economy.

    • What is the investment process?

  • The decision about how much to invest in securities.
  • The decision about which securities to invest in.
  • The decision about which securities and how much to invest in. (correct)
  • The decision about how much to invest in real assets.

    • During a high earnings period, it is advisable to...

    <p>invest in financial assets like stocks and bonds.</p> Signup and view all the answers

    What is one mechanism to mitigate agency problems?

    <p>Compensation plans that tie the income of managers to the success of the firm.</p> Signup and view all the answers

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