Liquidity Buffer and Forms of Investment Quiz

Determining financial goals and strategies for achieving them.

Investing to protect your wealth from inflation's erosion.

The primary goal of investing is to minimize financial worry in the future.

Involves optimizing investment returns, managing risks, and analyzing performance.

Investing can provide the means to be financially independent and pursue interests.

If one doesn't invest, they might have to work solely for income even in old age.

Investing aims to grow your wealth by earning profits and increasing its value.

Investing requires sacrifices in current enjoyment to potentially benefit in the future.

A collection of various investments, often including bank accounts and real estate.

Investments can act as a shield against inflation, protecting your money from diminishing in value.

Cash available for investment without impacting daily operations.

Bank accounts are intangible, representing digital value, while real estate is physical and tangible.

Cash held by an entity for unexpected expenses or emergencies.

Savings accounts offer lower interest rates than time deposits, which lock money in for longer periods.

Short-term debt securities issued by the government.

Short-term debt securities issued by large corporations.

A pool of money from multiple investors managed by a corporation.

Represents a share in the ownership of a company.

Investments that are generally considered less risky, like time deposits, jewelry, and real estate.

The allocation of investable funds among different investment types.

A person or team responsible for making investment decisions.

Investment instruments traded in money markets, including commercial papers and treasury bills.

The failure to create a financial plan for the future, which can lead to poor investment choices.

Places where financial instruments are bought and sold, like stock exchanges.

Financial instruments whose value is derived from the value of other assets.

Options are a type of derivative, giving the right but not the obligation to buy or sell an asset at a predetermined price.

A contract that obligates the buyer and seller to trade an asset at a specific price on a fixed date.

Diamonds are considered precious stones, valuable for their brilliance and rarity.

Credit ratings assess an organization's financial strength and ability to repay debt.

Generally, higher risk in investments can lead to the potential for higher returns.