ng.cengage.com . PRINCIPLES OF FINANCIAL MANAGEMENT (FN331001) MINDTAP Blueprint
ID: 1170632 • Letter: N
Question
ng.cengage.com . PRINCIPLES OF FINANCIAL MANAGEMENT (FN331001) MINDTAP Blueprint Problems Ch 11 Billingsley Due Today at 10 PM EDT nvestment plan that will help in achieving your goals, it is important to understand what are the different ways you can invest To help you become familiar with the following definitions. the terms for various investment alternatives, indicate the correct term for each of Types of Investment Alternatives Shares of ownership in An investment that can yield returns in the form of certain tax benefts An investment company purchased shares of ownership in it and then diversified portfolio of stoc assets and earnings of a business Common stock Real estate Mutual funds or ETFs Non-convertible bonds Preferred stock rents, capital gains, and that combines the funds of investors who have reinvests that money in a ks and bonds issued by other corporations or Interest-bearing, negotiable certificates of corporation, a municipelity (such as a city or long-term debe issued by a of both a stock and a bond Use your knowledge of different investment features and the information about the individunls below to complete the ollowing paragraphs Matthew believes that housing prices are suggests t to rise rapidly in the near future and wants to profit by investing in buying individual properties, but he has ittle practical knowledge of real estate. A frien n the real estate sector, because this type of vehicle offe a particular that Mathew fixed stated dividend rate, known as a preferred stock, Holders of this kind of stock receive dividends from real estate entirely and instead consider buying stock with a receive theirs. esc 2 3 4Explanation / Answer
Answers:
The first question os matching the terms with their definitions is conceptual, without needing much explanation:
Shares of ownership in the earnings and assets of business corporation - Common Stock
An investment that can yield returns in form of rents, capital gains and certain tax benefits - Real estate
An investment company that combines the funds from investors who have purchased shares of ownership in it and then reinvests that money in a diversified portfolio of stocks and bonds issued by other corporations or governments - Mutual Funds or ETFs
Interest bearing, negotiable certificates of long term debt issued by a corporation, a municipality or a federal government - Non-convertible bonds
An investment that has some characteristics of both bond and stock - Preferred stock
Fill in the blanks:
1. "mutual fund concentrated" - since the friend talks about the diversification that is associated with this time of fund. A mutual fund would invest in x number of companies maintaining business within real estate sector and hence the investor would get an exposure to real estate investment and will also achieve diverisifcation.
2. "before" - In order ot priority of payments, debt holders are paid interest first, then the preferred stock holders are paid the dividends and then common stock holders are paid. Common stock holders can't be paid before preferred stock holders get their share of dividends.
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