Q.No.1. what are the effect of determinants of asset demand on the decision of an individual? Being an investor which factors you keep in mind when you are going to invest or purchase some asset? Give examples and reasons in perspective of theory of asset
Answers
Answer:
To invest is to allocate money in the expectation of some benefit in the future.
In finance, the benefit from an investment is called a return. The return may consist of a gain (or loss) realized from the sale of a property or an investment, unrealized capital appreciation (or depreciation), or investment income such as dividends, interest, rental income etc., or a combination of capital gain and income. The return may also include currency gains or losses due to changes in the foreign currency exchange rates.
Investors generally expect higher returns from riskier investments. When a low risk investment is made, the return is also generally low. Similarly, high risk comes with high returns.
Investors, particularly novices, are often advised to adopt a particular investment strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk.