ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An investment is an asset or item acquired with the goal of generating income or appreciation. Appreciation refers to an increase in the value of an asset over time. When an individual purchases a good as an investment, the intent is not to consume the good but rather to use it in the future to create wealth.

Detailed explanation-2: -Investing is the purchase of assets with the goal of increasing future income. There is a large variety of investment opportunities that vary dramatically in the rates of return investors receive. Rate of return refers to the annual return on an investment including appreciation and dividends or interest.

Detailed explanation-3: -Bonds, stocks, mutual funds and exchange-traded funds, or ETFs, are four basic types of investment options.

Detailed explanation-4: -Appreciation-The increase in value of a financial asset. Asset allocation-The process of dividing investments among cash, income and growth buckets to optimize the balance between risk and reward based on investment needs.

Detailed explanation-5: -Live the lifestyle you can afford, not the one you want. Clear your debt. Build up your ‘what if’ fund. Invest for the future. Make sure you’re covered.