Podcast
Questions and Answers
Which factors primarily determine the risk of fixed property investment?
Which factors primarily determine the risk of fixed property investment?
What is a notable disadvantage of investing in collectibles?
What is a notable disadvantage of investing in collectibles?
How can damage to a collectible impact its financial value?
How can damage to a collectible impact its financial value?
What is a common characteristic of fixed deposits in terms of capital access?
What is a common characteristic of fixed deposits in terms of capital access?
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What happens to the interest rate on a fixed deposit if the prime rate changes?
What happens to the interest rate on a fixed deposit if the prime rate changes?
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What is the typical time frame for money market accounts?
What is the typical time frame for money market accounts?
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What is a common feature of returns on money market accounts?
What is a common feature of returns on money market accounts?
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Regarding the liquidity of investments, how do money market accounts compare to collectibles?
Regarding the liquidity of investments, how do money market accounts compare to collectibles?
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What is a potential consequence of investing in fixed deposits during periods of high inflation?
What is a potential consequence of investing in fixed deposits during periods of high inflation?
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What can influence the appreciation of a collectible over time?
What can influence the appreciation of a collectible over time?
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Study Notes
Investment Options
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Money Market Accounts:
- Short-term investment accounts
- Easy access to funds
- Liquid
- Lower interest rate than other savings options
- High liquidity
- Example: Call accounts
- Can be held indefinitely
- 32-day period (for example)
Fixed Deposits
-
Description:
- Invests fixed amount for fixed time
- Interest rate can be fixed or variable
- Long-term investment
- Funds received only at maturity or death of investor
- Penalty for early withdrawal
-
Risk:
- Bank liquidation (rare) is a slight risk
- Low overall risk
-
Return:
- Interest rates vary between banks
- Higher interest rates for longer terms and larger amounts
- May not offset inflation (cumulative interest)
- Possible capital growth via reinvestment of interest
Collectibles
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Description:
- Antiques, coins, artwork, stamps
- Market understanding crucial for investment
- Limited South African market versus international
- Technology improving accessibility to market
-
Risk:
- Damage diminishes value
- Requires expert knowledge
-
Return:
- Value increase potential with no damage
- No monthly income
- Volatility is low
- Potential for profit from low-cost buys of valuable items
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Description
This quiz explores various investment options, including money market accounts, fixed deposits, and collectibles. Understand the features, risks, and returns associated with each investment type to enhance your financial literacy. Test your knowledge and discover which investment might be best for you.
