Mastering Investment Definitions

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Questions and Answers

In which field does investment refer to tangible or physical assets that contribute income to the business or individual?

  • None of the above
  • Accounting
  • Finance
  • Economics (correct)

In which field does investment refer to physical assets that generate income for the business or individual?

  • Economics (correct)
  • Finance
  • Accounting
  • None of the above

What is a financial instrument?

  • A contract that provides non-financial assets to one party and entails financial liability or equity to another
  • A contract that provides financial assets to one party and entails financial liability or equity to another (correct)
  • A contract that provides non-financial assets to one party and entails non-financial liability or equity to another
  • A contract that provides financial assets to one party and entails non-financial liability or equity to another

Which of the following is NOT considered a financial asset in finance investment?

<p>Real estate (C)</p>
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Which of the following is not an example of assets held by a business for the accretion of wealth through distribution?

<p>Wages (B)</p>
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What is a stock?

<p>A share in the ownership of a company that represents a claim on the company's assets and earnings (A)</p>
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What does investment provide to a business, regardless of the many definitions of the term?

<p>Economic returns (A)</p>
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What is a callable bond?

<p>A bond that can be redeemed by the issuer at a predetermined price before maturity (D)</p>
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What is the common ground among the various definitions of investment?

<p>Investment provides financial or economic returns to the business (A)</p>
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