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CHAP 3 : INVESMENT ALTERNATIVES - Coggle Diagram
CHAP 3 : INVESMENT ALTERNATIVES
Invesment = the devotion of current resources with the expectation of receiving a larger amount of resources
3.1 TYPES OF ASSETS
REAL ASSETS
Tangible assets / physical capitals that generate income. (Eg: land)
Used to produce goods & services of a nation
FINANCIAL ASSETS
Intangible assets / claims that organization sells to finance their project. (Eg: stocks)
Refers to the claims that organization sell to finance their project
3.2 CLASSIFICATION OF RISK
Risk = potential of losing something value
SYSTEMATIC RISK
Refers to external or uncontrollable & non-diversified risk
Refers to factors affecting the prices of all securtities
Due to common factors
Cannot be protected against diversification
SOURCES
Purchasing risk
-Market risk
Interest rate risk
UNSYSTEMATIC RISK
Risk that are associated with random cause that can be eliminated
Due to unique factor
Affects return on one
Can be protected againts diversification
SOURCES
Business risk
Financial risk
3.3 INVESTMENT ALTERNATIVES
FINANCIAL ASSETS
- Securities
Treasury Bills (T-Bills)
Common Stocks
Bonds
Preferred Stocks
- Savings
Saving Account
Fixed Deposits
- Derivatives Securities
Options
Futures
- Unit Trust Funds
REAL ASSETS
- Real Estate
- Collectibles
- Gold