Compare and contrast lending and ownership investments
What will be an ideal response?
Answer: You actually lend someone your money in a lending investment, such as a saving account or a bond. The original investment or principal does not grow in a lending investment. It returns interest annually and the original investment when retiring it. Note: Bonds appreciate or depreciate in value based on changes in interest rates. Investing in bonds can lead to capital gain (loss) much the same as equities if timed properly.
An ownership investment, such as stocks or income-producing real estate, provides an annual return plus the potential for appreciation or growth in value of the original principal.
You might also like to view...
Ozone, when present in what major layer of the Earth's atmosphere, screens out ultraviolet energy harmful to living tissue.
a) Mesosphere b) Stratosphere c) Troposphere d) Thermosphere
The major benefit of enterprise application integration is that it ________
A) minimizes the requirement for formalized procedures B) acts as a cost effective alternative to ERP, with greater capabilities C) utilizes a centralized database D) enables organizations to use existing applications