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Personal Fin Plan Assi 2
Personal Fin Plan Assi 2
university
ASSIGNMENT
NO-2 [MGT-636]
TOPIC- Comparative analysis of allotted investment
alternatives.
Submitted by Guided by
CHANDAN KUMAR SINGH Mr. Lovey Agarwal
Section-B
ETFs: Exchange traded funds (ETFs) hold assets such as stocks, bonds,
commodities and precious metals.
Hedged funds: Hedge funds invest in a broad range of investment options,
including stocks, debt and commodities.
Real estate: This investment option involves buying and selling immovable
property, such as land and buildings.
The liquidity of these investments is lower than that of stocks, bonds and
cash.
The fee structures for these investments are generally higher than those for
stocks and bonds.
These investments require specific expertise, as a result of which the costs
associated with due diligence are high.
It is difficult to establish benchmarks for these investments. This hinders
the performance appraisal of the investments Moreover; the lack of
performance data limits an investor’s ability to make an informed choice.
Risk
In investing parlance, risk refers to the probability of a monetary loss or actual
returns from an investment being lower than the expected returns. There is an
inverse relationship between investing risk and return. Investment options that are
risky need to offer higher returns than those that are less risky in order to attract
investors and make it worthwhile to take on the additional risk.
Total Return
Total Return represents one of the easiest estimations, which also includes
dividends as part of our considerations. The formula for calculating total return is:
Simple Return
Simple return calculations are executed after you have sold the investment. The
formula you use to calculate it is:
Return: - 8%
Maturity is 1 to 10 year
We very well know that when we invest some amount of money in various
investment plan. There has always some or high risk available. In we take
high risk then we earn high return. If we take low risk we take low return.
High Risk = High Return.
Low Risk = Low Return.
It means if we take high return that means us aware high risk. When we
invest in FD it is a secure type of investment. If we invest money in share it
gives high return but also here high risk.
Indian budget 2010 came in the favor of Indian economic. We know that it is the
time of inflection so govt always want to control the inflection. It is a favorable for
the investment. Whole world are faced the economic crisis and India also faced it.
So we say that the budget has the positive impact on our investment.
We all see prices rising all the time. It’s a given. And we also know that inflation
eats into our returns. This is even more important than income, especially because
you have total control over this. Let’s say the inflation is 8%, and you invest in a
bank fixed deposit (FD) that gives you 10%. Should you be happy? Apparently,
yes, because you are earning more than the prevailing rate of inflation. But how can
we forget the all-pervasive income tax? If you fall in the highest tax bracket of
30%, the effective post-tax return for you is only 7% - which is less than the rate of
inflation.
Therefore, you should choose your investments very wisely, especially in times
of high inflation. And it has a positive impact.