Investment Options Evaluation
22 Questions
0 Views

Investment Options Evaluation

Created by
@FestiveOtter

Podcast Beta

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the trade-off between when considering a product with a lock-in period?

  • Tax deduction and returns
  • Liquidity and tax deduction (correct)
  • Returns and convenience
  • Liquidity and convenience
  • Why is real estate considered a popular asset class?

  • Because it is a common expense for individuals (correct)
  • Because it is a convenient investment
  • Because it provides high returns
  • Because it is a liquid asset
  • What is a key aspect to consider when evaluating the liquidity of an investment?

  • The minimum investment required
  • The potential for capital appreciation
  • The ease of liquidating part of the investment (correct)
  • The overall safety of the investment
  • What is an important consideration when evaluating an investment product?

    <p>Both the investor's situation and the product's features</p> Signup and view all the answers

    What is the primary purpose of investing, according to the definition of investments?

    <p>To get some returns from investment</p> Signup and view all the answers

    What can affect the liquidity of an investment?

    <p>The lock-in period of the investment</p> Signup and view all the answers

    What is a characteristic of real estate investments?

    <p>They are often purchased for self-occupation</p> Signup and view all the answers

    What is a trade-off to consider when investing?

    <p>Liquidity vs. returns</p> Signup and view all the answers

    What is a benefit of considering multiple factors when evaluating an investment product?

    <p>It leads to a more informed decision</p> Signup and view all the answers

    Why might an investment have a lock-in period?

    <p>To encourage long-term investing</p> Signup and view all the answers

    What are the four broad asset categories or asset classes?

    <p>Real estate, Commodities, Equity and Fixed income</p> Signup and view all the answers

    What is a consideration when evaluating the convenience of an investment?

    <p>The ticket size of the investment</p> Signup and view all the answers

    What can reduce the returns on an investment?

    <p>A penalty for early withdrawal</p> Signup and view all the answers

    What should be considered when evaluating the tax implications of an investment?

    <p>The taxability of earnings</p> Signup and view all the answers

    What is an important factor to consider while evaluating an investment option?

    <p>All of the above</p> Signup and view all the answers

    Why is it necessary to consider taxability of income while investing?

    <p>Because it affects the net returns on investment</p> Signup and view all the answers

    What is the significance of minimum investment amount in investment decisions?

    <p>It is a key factor in investment selection</p> Signup and view all the answers

    Why is it important to consider tax deductions while investing?

    <p>Because it increases the return on investment</p> Signup and view all the answers

    What happens if an investor sells an investment before the maturity period?

    <p>The investment returns become taxable</p> Signup and view all the answers

    What is the significance of convenience in investment options?

    <p>It makes investing and tracking easier</p> Signup and view all the answers

    Why is it important to consider multiple factors while evaluating an investment option?

    <p>Because each factor has a unique impact on the investment</p> Signup and view all the answers

    What should an investor avoid while selecting an investment option?

    <p>Considering only the minimum investment amount</p> Signup and view all the answers

    Study Notes

    Investment Evaluation Factors

    • Convenience: ability to invest, withdraw, and monitor investment value
    • Ticket size: minimum investment amount required, varying from ₹50 to ₹1 crore or more
    • Taxability of income: considering taxation of earnings and its impact on returns
    • Tax deduction: availability of deductions on investments, effectively increasing returns

    Safety and Liquidity

    • Safety: ensuring capital investment and income security
    • Risks involved in understanding investment safety
    • Liquidity: ease of converting investments to cash, varying across categories and products
    • Divisibility: possibility of partial liquidation or need for full sale
    • Operational features: lock-in periods, penalties, and exit charges affecting liquidity

    Returns and Asset Classes

    • Returns: current income (periodic) and capital appreciation (capital gains)
    • Asset classes: categorizing investments based on similar characteristics
    • Four broad categories: Real Estate, Commodities, Equity, and Fixed Income
    • Real Estate: most popular asset class, often considered an expense rather than an investment

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Description

    Evaluating investment opportunities based on convenience, ticket size, and other factors. Learn about the key considerations for investing in different avenues.

    More Like This

    Use Quizgecko on...
    Browser
    Browser