FINA 3315 EXAM 1 2025
QUESTIONS AND ANSWERS
100% PASS
investment - ✔✔any asset into which funds can be placed with the expectation that it
will generate positive income and/or increase its value
return - ✔✔the reward for owning an investment
- Income from investment
- Increase in value of investment
Attributes of Investments - ✔✔securities, liquidity, property, debt, equity, derivative
securities
Securities - ✔✔investments issued by firms, governments, or other organizations that
represent a financial claim on the issuer's resources
Liquidity - ✔✔the ability to buy and sell quickly
Property - ✔✔real assets that are typically less liquid than securities
- Real property: land, buildings, and things permanently affixed tothe land
- Tangible personal property: such as gold, artwork, antiques, and collectibles
COPYRIGHT © 2025 BY GRACE AMELIA, ALL RIGHTS RESERVED 1
, direct investment - ✔✔investor directly acquires a claim/ownership
indirect investment - ✔✔investor indirectly acquires a claim/ownership via a
professional investment manager
debt - ✔✔investor lends funds in exchange for interest income and repayment of loan in
future (bonds)
equity - ✔✔ongoing ownership in a business or property (common stocks)
derivative securities - ✔✔neither debt nor equity; derive value from an underlying asset
(options)
risk - ✔✔uncertainty surrounding the return that a particular investment will generate
- Low-risk: more predictable, lower average return
- High-risk: less predictable, higher average return
diversification - ✔✔holding different types of assets in an investment portfolio
Short-term investments - ✔✔maturities of one year or less
long-term investments - ✔✔maturities of longer than one year
domestic investment - ✔✔securities issued by domestic companies
Foreign - ✔✔securities issued by foreign companies
households - ✔✔- some need for loans (house, auto)
- Typically net suppliers of funds
Government - ✔✔federal, state, and local projects and operations
- typically, net demanders of funds
Businesses - ✔✔- Investments in production of goods and services
COPYRIGHT © 2025 BY GRACE AMELIA, ALL RIGHTS RESERVED 2
QUESTIONS AND ANSWERS
100% PASS
investment - ✔✔any asset into which funds can be placed with the expectation that it
will generate positive income and/or increase its value
return - ✔✔the reward for owning an investment
- Income from investment
- Increase in value of investment
Attributes of Investments - ✔✔securities, liquidity, property, debt, equity, derivative
securities
Securities - ✔✔investments issued by firms, governments, or other organizations that
represent a financial claim on the issuer's resources
Liquidity - ✔✔the ability to buy and sell quickly
Property - ✔✔real assets that are typically less liquid than securities
- Real property: land, buildings, and things permanently affixed tothe land
- Tangible personal property: such as gold, artwork, antiques, and collectibles
COPYRIGHT © 2025 BY GRACE AMELIA, ALL RIGHTS RESERVED 1
, direct investment - ✔✔investor directly acquires a claim/ownership
indirect investment - ✔✔investor indirectly acquires a claim/ownership via a
professional investment manager
debt - ✔✔investor lends funds in exchange for interest income and repayment of loan in
future (bonds)
equity - ✔✔ongoing ownership in a business or property (common stocks)
derivative securities - ✔✔neither debt nor equity; derive value from an underlying asset
(options)
risk - ✔✔uncertainty surrounding the return that a particular investment will generate
- Low-risk: more predictable, lower average return
- High-risk: less predictable, higher average return
diversification - ✔✔holding different types of assets in an investment portfolio
Short-term investments - ✔✔maturities of one year or less
long-term investments - ✔✔maturities of longer than one year
domestic investment - ✔✔securities issued by domestic companies
Foreign - ✔✔securities issued by foreign companies
households - ✔✔- some need for loans (house, auto)
- Typically net suppliers of funds
Government - ✔✔federal, state, and local projects and operations
- typically, net demanders of funds
Businesses - ✔✔- Investments in production of goods and services
COPYRIGHT © 2025 BY GRACE AMELIA, ALL RIGHTS RESERVED 2
