BASICS OF INVESTMENT
What is an investment process?
A sequence of steps and actions to implement investment activity.
What is the main goal of most investors?
To earn profit.
Name one participant of the investment process.
The state / companies / individual investors.
What is the first stage of the investment process?
Making the decision to invest.
Which investment is linked to production?
Real investment.
What is the life cycle of an investment project?
The period from the investment idea to receiving profit.
Name two investment objectives.
Profit growth and job creation.
Who are emitters?
Organizations that issue securities.
Name one part of making the investment decision.
Formation of objectives.
Which investment has higher liquidity?
Financial investment.
Name one objective of investment.
Profit growth (or production expansion).
What investment form is preferred by institutional investors?
Financial investments (securities).
What role do banks play in investments?
They accumulate and redistribute capital
What happens during the investment stage?
Construction and purchase of equipment.
Name one feature of real investments.
Low liquidity or high risk.
What determines the choice of an investment object?
The investor’s objectives and expected return and risk.
What factors influence the choice of investment direction?
Company size, strategy, inflation, interest rate, life cycle stage.
Who are professional market participants?
Brokers, dealers, banks, investment organizations.
What happens during the operational stage?
Production starts and profit is earned.
Why are real investments riskier?
Due to technological and obsolescence risks
Why are real investments long-term?
Because they include construction, equipment purchase, and production.
Why do companies invest in tangible and intangible assets?
To expand production and improve quality.
Why does the state participate in the securities market?
To regulate and redistribute capital.
Why is object selection critical?
Because wrong decisions are hard to correct.
What is portfolio restructuring?
Changing portfolio structure to improve profit and reduce risk.