Integrative project. Session 1.1

Is the current commitment of money or other resources in the expectation of reaping future benefits, involves an outlay of resources today in exchange for an expected return in the future, usually involving some element of risk. Investment. Risk free rate. IRR.

4 elements of investment. Money/resources, time horizon, risk, future benefit. Production opportunities, time preferences for consumption, risk and inflation.

What you hand over today: Cash time, effort or capital. Money/resources. Time horizon. Risk. Future benefit.

The period needed to realize the benefit. Money/resources. Time horizon. Risk. Future benefit.

The uncertainty that outcomes may differ from expectations. Money/resources. Time horizon. Risk. Future benefit.

Expected growth, income or advantage. Money/resources. Time horizon. Risk. Future benefit.

Fundamental factor that affect the cost of money. Production opportunities, time preferences for consumption, risk, inflation. Money, time horizon, risk, future benefit.

The ability to turn capital into benefits. Production opportunities. Time preferences for consumption. Risk. Inflation.

Providers can use their current funds for consumption or saving. Production opportunities. Time preferences for consumption. Risk. Inflation.

Also leads to a higher cost of money, is an increase in the average price of goods and services in terms of money. Production opportunities. Time preferences for consumption. Risk. Inflation.

What does an investor is looking for?. Efficient portfolio. Maximize expected return for a higher level of risk.

Classifies investments by the nature of the underlying asset. Nature of the asset. Holding method. Risk level. Time frame. Geographic location.

Direct purchase of shares vs. pooled vehicles. Nature of the asset. Holding method. Risk level. Time frame. Geographic location.

Categorizes investments by their associated risk, low to high. Nature of the asset. Holding method. Risk level. Time frame. Geographic location.

Based on the period until maturity. Nature of the asset. Holding method. Risk level. Time frame. Geographic location.

Domestic vs. investments abroad. Nature of the asset. Holding method. Risk level. Time frame. Geographic location.

The same instrument can be either, depending on how you use it. Investment and speculation. Investment and IRR.