Investments Concepts Overview
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Questions and Answers

What is the main goal of investing?

  • To spend money quickly
  • To achieve long-term financial goals (correct)
  • To minimize financial risk
  • To keep money stagnant

What is a portfolio?

  • A single investment
  • An investment with high liquidity
  • An investment with guaranteed returns
  • A collection of different investments (correct)

What does liquidity refer to in investments?

  • The stability of the investment value
  • The ability to buy and sell quickly (correct)
  • The ability to generate income
  • The long-term growth potential

Which type of investment includes real assets like land and buildings?

<p>Real property (B)</p> Signup and view all the answers

What is the difference between direct and indirect investments?

<p>Direct investments involve acquiring ownership directly, while indirect investments involve acquiring ownership through a professional manager (C)</p> Signup and view all the answers

What is the main difference between Debt and Equity securities?

<p>Debt securities provide interest income and repayment of loan, while Equity securities provide ongoing ownership in a business. (C)</p> Signup and view all the answers

What is the primary characteristic of High-risk investments?

<p>They are less predictable. (D)</p> Signup and view all the answers

What is the main distinction between Short-Term and Long-Term investments?

<p>Short-Term investments have maturities of longer than one year, while Long-Term investments have maturities of one year or less. (C)</p> Signup and view all the answers

How do Financial Institutions participate in the investment process?

<p>By pooling the resources of households and making loans or investing in securities. (A)</p> Signup and view all the answers

Who are considered Institutional Investors?

<p>Investment professionals who manage other people's money. (D)</p> Signup and view all the answers

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