MCS 2100 Lecture Notes - Lecture 7: Certified Financial Planner, Preferred Stock, Canada Savings Bond

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Getting the money needed to start an investment program: Inflation risk > a rise in the general level of prices reduces buying power; inflation rate might not keep pace with inflation rate. Interest rate risk > asso(cid:272)iated (cid:449)ith a fi(cid:454)ed (cid:396)etu(cid:396)(cid:374) i(cid:374)(cid:448)est(cid:373)e(cid:374)t i(cid:374) preferred sto(cid:272)ks o(cid:396) go(cid:448)(cid:859)t/(cid:272)o(cid:396)po(cid:396)ate (cid:271)o(cid:374)ds; the (cid:396)esult of (cid:272)ha(cid:374)ges i(cid:374) the interest rates in the economy; value of bonds when interest rates. Investment income > investors sometimes purchase certain investment because the want a predicable source of income (guaranteed investment certificates, canada savings. Bods, canadian treasury bills as well as some speculative investments) Investment liquidity > the ability to buy or sell an investment quickly without substantially affe(cid:272)ti(cid:374)g the i(cid:374)(cid:448)est(cid:373)e(cid:374)t(cid:859)s (cid:448)alue (cid:894)(cid:272)he(cid:395)ui(cid:374)g a(cid:374)d sa(cid:448)i(cid:374)gs a(cid:272)(cid:272)ou(cid:374)ts(cid:895) Stock or equity financing: equity capital money that a business obtains from its owners, stocks a certificate that shows the amount of the company that you own, 2 types, common stocks, preferred stocks.

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