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Economics11.06:HW02.03 Investments - Notas - Jose Jui. - Coggle Diagram
Economics11.06:HW02.03
Investments - Notas - Jose Jui.
Objectives & Expectations
Describe how financial assets are created in a free enterprise system.
Explain the role of the major non-depository financial institutions in the financial system.
Compare and contrast some major advantages of using an online brokerage rather than a stockbroker.
Explain why portfolio diversification is an important investment strategy.
Argue and support why someone might want to buy stock during a bear market.
Analyze the circumstances under which an investor may make money after signing a futures contract.
Explain the role of savings in the financial system.
Money´s uses can be put into 3 categories:
Spend-Pay
Save
Invest
Uncertainty and Risk
The higher the uncertainty, the higher the risk.
Risk means the chance of losing everything.
Low probability of losing all your invested money.
The lower the uncertainty, the lower the risk.
Most Common Investment Options
Low Risk Options
Savings Accounts
Insurance
Government Bonds
Real Estate
High Risk Options
Stocks
Mutual Funds and NFT´s
Cryptocurrencies
Commodities
Private Equity-Entrepreneurship