What Type of Investment Occurs When Claims to Wealth in the Form

question 7

Multiple Choice

What type of investment occurs when claims to wealth in the form of financial assets are purchased or when debt obligations are repaid?

• A)financial investment
• B)real investment
• C)contractual investment
• D)voluntary investment

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Definitions:

NAV

Net Asset Value, the total value of a fund's assets minus its liabilities, often used to price each share of a mutual fund or ETF.

Capital Gain Distributions

Payments made to mutual fund shareholders from the fund's sale of securities that result in a capital gain.

Income Distributions

Income distributions refer to the payment of earnings, interests, dividends, or other income, from an investment or fund to its shareholders or investors.

Rate of Return

The positive or negative return on an investment over a given period, measured as a percentage of the investment's initial price.