192k views
5 votes
1. Based on the module, what are some factors that influence how individuals invest

their money, and what should individuals keep in mind when investing money?

2 Answers

3 votes

When deciding whether or not an individual should invest in something, they need to take a couple of things into consideration. For example, how much money will be invested, the risks involved, the financial goal, and the consequences of not reaching that goal. It's smart for the individual to invest in multiple things, so if one isn't making much money there will be other investments that are.

For the next part of the question: Include three different asset classes you learned about that could be used for investments, along with at least one advantage of each.

One asset class is common stocks. In this class, when a company makes a profit, stockholders receive payment in dividends. They have the ability to generate greater revenue, but dividends are never guaranteed, so investors need to invest carefully. Next, bonds are long-term investment choices. In this class, the investor will purchase a bond, pay periodic interest to the bondholder until the set maturity date, where the investor will then be paid back in full. This type of asset is very common because there is little risk involved. Lastly, government bonds are a type of bond. In this asset, bonds are backed by the government, so they're considered risk-free. However, they have lower interest rates than other bonds.

User Randhir
by
4.8k points
2 votes

ANSWER:

INCLUDE 3 DIFFERENT ASSET CLASSES YOU LEARNED ABOUT THAT COULD BE USED FOR INVESTMENTS, ALONG WITH AT LEAST ONE ADVANTAGE FROM EACH.

EXPLAIN:

THE POTENTIAL RETURN ON ANY INVESTMENT SHOULD BE DIRECTLY RELATED TO THE RISK THE INVESTOR ASSUMES.

User Sky Scraper
by
3.4k points