The Financial Account Consists COMPLETELY of Which Three Components

question 1

Multiple Choice

The financial account consists COMPLETELY of which three components?

• A) stock investment, bond investment, and mutual fund investment
• B) direct investment, stock investment, and bond investment
• C) direct investment, portfolio investment, and other asset investment
• D) mutual fund investment, portfolio investment, and stock investment

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Definitions:

Rate of Return

The returns or setbacks realized from an investment over a certain time period, expressed as a percentage of the initial capital invested.

Yield to Maturity

The total return anticipated on a bond if the bond is held until it matures, factoring in all interest payments made over time.

Zero-coupon Bond

A bond that does not pay interest during its life and is sold at a discount from the face value, which is paid to the holder at maturity.

Forward Interest Rate

A rate that is deduced from current bond yields, representing the expected future interest rate between two periods.