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It is important to define your investment goals because it will help you in creating an investment plan. Your Investment plan specifies where your capital

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It is important to define your investment goals because it will help you in creating an investment plan. Your Investment plan specifies where your capital will be invested and what investment vehicles you will use. To create an investment 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 terms for various investment alternatives, indicate the correct term for each of the following definitions. Types of Investment Alternatives Shares of ownership in the assets and earnings of a business corporation An Investment company that combines the funds of 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 Interest-bearing, negotiable certificates of long-term debt issued by a corporation, a municipality (such as a city or state), or the federal government An Investment that has some characteristics of both a stock and a bond An investment that can yield returns in the form of rents, capital gains, and certain tax benefits Use your knowledge of different investment features and the information about the individuals below to complete the following paragraphs: Matthew believes that housing prices are likely to rise rapidly in the near future and wants to profit by investing in real estate. He is considering buying individual properties, but he has little practical knowledge of real estate. A friend suggests that he buy in the real estate sector, because this type of investment vehicle offers diversification within a particular sector. Another friend advises that Matthew stay away from real estate entirely and instead consider buying stock with a fixed stated dividend rate, known as a preferred stock, Holders of this kind of stock receive dividends h olders of common stock receive theirs

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