CORDERO, KRISTIAN CHARLES L.

BSHM 4
BUSINESS FINANCE

Activity 1: “My weekly budget”

Directions: Answer the following questions and compute your daily
expenses for a week.
1. Where does my money came from?
- my money came from my mother.
2. Where does my money go?
- my money goes to:
 80 for Food and drinks
 50 for Gasoline
 20 for my other needs.
2. How much do I save?
- I save 50 pesos per day or 350 per week

Allowance Expenses Savings

Monday Php 200.00 Php 150.00 Php 50.00
Tuesday Php 200.00 Php 150.00 Php 50.00
Wedenesday Php 200.00 Php 150.00 Php 50.00
Thursday Php 200.00 Php 150.00 Php 50.00
Friday Php 200.00 Php 150.00 Php 50.00
Saturday Php 200.00 Php 150.00 Php 50.00
Sunday Php 200.00 Php 150.00 Php 50.00
Total Php 1,400.00 Php 1,050.00 Php 350. 00
1. Where do I put my savings?
- I put my saving In my gcash account

Activity 2: Matching type

Directions: Match the investment asset in column A with its
advantage and disadvantage in column B by writing your answer in
your answer sheet.

(A) Investment (B) Advantage/Disadvantage

Asset
1 Stocks A, On some of traditional plans,
no sickness/death until a certain
age may mean not getting any
benefits at all.
2 Bank Deposit B. Shorter, if any, holding period
vs. bonds
3 Mutual Funds C. Can be a source of recurring
rental income
4 Real Estate D. Riskiest of all assets (can
lose as much as 50% of their money
in one day)
5 Insurance E. Pay management fees
Answer:
1.D
2.B
3.E
4.C
5.A
Activity 3
Directions: Answer the question briefly.
Let us say you have Php1,000,000 today which you can invest for
the next 10 years, where will you put it? Choose at least 2 types
of investment and explain why?
If let „say you have Php1,000,000 today which you can invest for
the next 10 years, where will u put it and why

If I had Php1,000,000 to invest over the next ten years, I

would explore a mix of equities and bonds.

Equities: I would invest a part of the cash in equities. Stocks

have the potential for long-term capital appreciation, and
historical evidence implies that they can provide competitive
returns. Stocks have the ability to outperform inflation and
deliver considerable growth over a 10-year period.

Bonds: A part of the cash would be invested in bonds. Bonds are

less risky than stocks and can provide a consistent supply of
interest income. They can operate as a stabilizing factor in an
investing portfolio, preserving cash and lowering total risk.

This stock-bond mix would provide a balanced strategy,

aiming for both growth and income while controlling risk.
However, the particular mix of stocks and bonds should be based
on individual financial goals, risk tolerance, and liquidity
requirements. A well-rounded investing plan would also include
diversification and occasional portfolio rebalancing.

ASSESSMENT

True or False
Directions: On your answer sheet, write TRUE if the idea being
expressed is correct and FALSE if otherwise.
1. TRUE - Investments can generate passive income, such as
dividends from stocks, rental income from real estate, or
interest from bonds.
2. FALSE - Time deposit accounts do earn interest. They are
fixed-term savings accounts that provide a specific interest
rate over a set period.
3. TRUE - Banks issue bank statements on savings deposit
accounts, typically on a monthly basis, to provide a record
of transactions and balances.
4. TRUE - Insurance policies are set up for a specific purpose,
such as providing financial protection in the event of
illness, accidents, or death, and they typically mature at a
certain time in the future.
5. TRUE - Mutual funds generally have the potential to earn
more than savings accounts over the long term, although they
also come with higher risk.
6. FALSE - Bonds earn interest, not dividends. Dividends are
typically associated with stocks.
 7. FALSE - Dividends are not always declared regularly. The
timing and amount of dividend payments can vary.
8. TRUE - Stocks are generally considered riskier than bonds
because their value can fluctuate significantly in the short
term.
9. TRUE - Real estate investments can earn rental income when
properties are rented out to tenants.
10.TRUE - Hard assets are tangible assets, such as real
estate, precious metals, and physical goods, as opposed to
financial assets like stocks or bonds.

Case Analysis

January is nearing his retirement. He was able to save up to a

significant amount of money and is planning to invest it to earn
something when he has already retired. After considering a lot of
factors, he came down with two choices; buy stocks or construct a
building to be rented out to others as a dormitory. Which option
would work best for January and why
Answer:
Purchasing Stocks:
Growth potential: Stocks have the potential for capital
appreciation over time, which can result in investment returns.
Stock market returns, on the other hand, can be volatile and are
affected by market circumstances as well as individual business
performance.
Diversification: When compared to investing in a single property,
investing in a diverse portfolio of equities can spread the risk
and perhaps give a better level of stability.
Stocks are often more liquid than real estate, which means they
can be purchased and sold more readily. This liquidity can give
flexibility if January requires immediate access to his cash.

Building a Rental Property:

Renting out a property, such as a dormitory, may provide a stable
source of rental income, which can be beneficial for retirees
seeking for consistent cash flow.
Real estate appreciation: Real estate properties, particularly
those located in attractive areas, have the potential to increase
in value over time. When January decides to sell the property,
this might result in capital gains.
Furthermore, the best January alternative is determined by his
specific circumstances, financial objectives, risk tolerance, and
preferences. Stocks may be a great alternative if he desires a
possibly more liquid and diverse investment with the potential
for more volatility. Construction of a building for rent, on the
other hand, may be a reasonable choice if he wants a consistent
revenue stream and is ready to take on the obligations of
property ownership and maintenance. January should speak with a
financial counselor who can give individualized advice based on
his unique position and aspirations.