When Investing, in Your Role as an Investor You Should

question 104

Multiple Choice

When investing, in your role as an investor you should not

• A) Evaluate potential investments.
• B) Let the investments manage themselves.
• C) Monitor the value of investments.
• D) Keep accurate records.
• E) Consider tax consequences of selling investments.

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Definitions:

Required Rate Of Return

The minimum percentage return an investor expects to receive from an investment to compensate for its risk.

Initial Cash Investment

The amount of cash used to fund a new investment or project at its outset.

Salvage Value

The anticipated amount to be received from the sale of an asset when it is no longer useful.

Cash Flow

The total amount of money being transferred into and out of a business, which is used for assessing its liquidity, operational efficiency, and financial health.