Milette S.

Caliwan 08/09/2020
BFN-B3E Prof. Barba

M1: Assignment 1

1. What is investment?
An investment is an asset or item acquired with the goal of generating income or
appreciation. In an economic sense, an investment is the purchase of goods that are not
consumed today but are used in the future to create wealth. So, to invest is you need to
allocate money in the expectation that it will generate positive income to their principal
value and it may preserve or increase. An investment always concerns the outlay of
some asset today (time, money, effort, etc.) in hopes of a greater payoff in the future
than what was originally put in.
2. What is an investment in finance?
In finance, an investment is a monetary asset purchased with the idea that the
asset will provide income in the future or will later be sold at a higher price for a profit.
This includes the purchase of bonds, stocks or real estate property among several
others. Additionally, a constructed building or other facility used to produce goods can
be seen as an investment. The production of goods required to produce other goods
may also be seen as investing.
3. What is a portfolio?

A portfolio is a grouping of financial assets such as stocks, bonds, commodities,

currencies and cash equivalents, as well as their fund counterparts, including mutual,
exchange-traded and closed funds. A portfolio can also consist of non-publicly tradable
securities, like real estate, art, and private investments. Money market accounts make
full use of this concept to function properly.

Portfolios are held directly by investors and/or managed by financial

professionals and money managers. Investors should construct an investment portfolio
in accordance with their risk tolerance and investing objectives. Investors can also have
 multiple portfolios for various purposes. It all depends on one's objectives as an
investor. 

4. What is portfolio management?

Portfolio Management is the art and science of selecting and overseeing a group
of investments that meet the long-term financial objectives and risk tolerance of a
client, a company or an institution. Also, it presents the best investment plan to the
individuals as per their income, budget, age, and ability to undertake risks. Portfolio
management minimizes the risks involved in investing and also increases the chance of
making profits.