1. Chapter FIN3244 Investment=An asset or item that is purchased with the hope that it will generate income or appreciate in the future. Returns=The rewards from investing received as current income and or increased value. Securities=An instrument representing ownership (stocks), a debt agreement (bonds) or the rights to ownership (derivatives). Property=Investments in real property or tangible personal property Direct investment= Investment in which an investor directly aquires a claim on a security or property Indirect investment= Investment made in a portfolio or collection of securities or properties Debt=Funds lent in exchange for interest income and a promised repayment of the loan at a given future date Equity= Ongoing ownership in a business or property Risk=The chance that actual investment returns will differ from those expected Short term investments= that Investments muture within a year. Long term investments= Investments with maturities longer than a year or with no maturity at all. Dividends= Periodic payments make by firms to their shareholders Money market mutual funds=Mutual Funds that invest solely in shortterm investment vehicles Mutual fund=A company that raises money from sale of its shares and invests in and professionally manages a diversified portfolio of securities.
Real estate=Entities such a residential homes, raw land, and income property. Net losses= the amount by which capital losses exceed capital gains. Tax planning= The development of strategies that will defer and minimize an individuals level of taxes over the long run. Market timing= The process of identifying the current state of the economy/market and assessing the likelihood of its continuing on its present course.