BF 2nd quarter

You are called by your Business Finance teacher in an oral recitation and are asked to explain the             comparison and the difference between a currency and a crypto-currency. Which of the following             statements best describes the two examples of investment?

 

• Currencies are physically exchanged using coins or notes while cryptocurrencies do not have any physical form and are a digital medium of exchange with encrypted codes.

• Crypto and fiat currency can function as a medium of exchange and both have a central issuing or regulating authority.

• Both cryptocurrency and currency cannot be used to purchase groceries in the supermarket.

• Cryptocurrency is a digital medium of exchange with encrypted codes. It is intangible

Which of the following statements best describes the meaning of investment?

         

• It is an asset or item acquired to generate income or appreciation over time.

• It is any asset or instrument purchased to sell for a price higher than the purchase price at some future point in time.

• Buying and selling products can be considered investing.

• Investors look for different ways to invest their money to generate more income.

Which of the following statements correctly compares or contrasts different types of investments?

• Stocks offer high returns and ownership in a company but with greater risk, while bonds, issued by governments or corporations, provide fixed interest payments and are generally lower risk.

• Both savings accounts and Certificate of Deposits are low-risk investment options offered by banks, providing a way to store money and earn high interest.

• Stocks are generally riskier than bonds, but both also have the potential for lower returns.

• Bonds are the least risky investment option and always provide a fixed rate of return.        

Which of the following statements correctly contrasts a real state and an insurance?

           

• Real estate involves physical assets like properties, while insurance is a financial product that protects against specific risks through contractual agreements.

• Real estate involves ownership of tangible properties, while insurance represents a financial contract protecting against potential risks.

• Real estate and insurance both involve aspects of risk management and can be considered assets.

• Both can be considered assets in an investment portfolio.

Which statement best describes the term “appreciation” when it comes to investing?

         

• Appreciation refers to the increase in value of an investment over time, resulting in a higher market price or asset value.

• Appreciation can also signify the acknowledgment or recognition of the positive performance or growth of an investment.

• Appreciation may involve the gratitude or favorable perception an investor has towards the returns or benefits gained from an investment.

• Appreciation could be mistakenly interpreted as depreciation, which refers to the decrease in value of an investment over time.

Why would a risk-taker type of investor prefer equities over fixed income?

       

• A risk-taker investor might prefer equities over fixed income because stocks have historically offered higher returns over the long term, though with greater volatility and risk.

• A risk-taker might favor equities is the potential for capital appreciation through stock price increases, aligning with their desire for higher returns.

• Equities can provide opportunities for risk-takers to participate in the growth of dynamic companies and industries, potentially leading to significant gains.E

• Risk-takers might prefer equities because they offer guaranteed fixed returns, providing stability and security compared to the uncertainties of the stock market.

Imagine you're a young professional looking to invest some savings for the long term. You're interested in diversifying your portfolio but don't have the time or expertise to manage individual stocks. In this scenario, what role might a mutual fund play in achieving your investment goals?

         

• Mutual funds offer diversification and professional management, ideal for investors seeking long-term growth without extensive time commitment.

• Mutual funds provide convenience and diversification, but investors should research funds aligning with their objectives.

• Mutual funds offer diversity and management, but research on fees and performance is crucial.

• Mutual funds are only for the short term and don't provide diversification. Individual stocks are better for growth.

Which of the following is a disadvantage of a Mutual Fund?

           

• Advanced portfolio management       

• Absolute Dividend reinvestment

• Risk reduction and negotiation   

• High Expense Ratios and sales charges

Among the statements below, which of the following is considered a disadvantage of a crypto-currency investment?

           

• Data losses can cause financial losses

• The centralized but still operated by some organization

• Some coins available in other fiat currencies

• Secure and private

You've recently inherited a significant amount of money and are considering various investment options. Given your long-term financial goals and desire for stability, how might investing in real estate offer unique advantages compared to other investment avenues?

           

• Generally, appreciates over time because land gets scarce.

• Have relatively moderate correlations with other asset classes

• Can be a source of a one-time rental income

• Huge capital is needed, financing can be difficult