Understanding the Definitions of Investment
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Questions and Answers

What is the general use of money to generate more income known as?

  • Investment (correct)
  • Consumption
  • Earnings
  • Savings

    • According to finance, what is the act of investing?

  • Delaying savings for consumption
  • Use of resources to boost earnings
  • Savings for future consumption
  • Purchase of a financial product with the expectation of future financial gain (correct)

    • What is the most crucial characteristic of financial investments?

  • Guaranteed returns
  • Low initial investment
  • High level of market liquidity (correct)
  • Quick and high returns

    • What does investing entail in terms of future reward?

    <p>Income through recurring interest, dividends, premiums, or an increase in the value of the primary capital</p> Signup and view all the answers

    What should be the goal of an investor according to the text?

    <p>Balance risk and return</p> Signup and view all the answers

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