I have seen this came up many times in past exams asking for the "principles of investment" for 2 marks. Could you score full mark by simply saying
"company should invest so as to maximise the overall return on assets, subject to the risk therein being within the financial resources available to it" ?
Or do you also need to write out the three conditions (as below) to get the 2 marks?
1-select assets appropriate to nature/term/currency of liabilities,
2-maximise overall return,
3- may depart from 1 in order to meet 2 given level of free assets and risk appetite
Just want to make sure no time gets wasted in the exam, so any clarity would be appreciated!
Thanks!
M.
Last edited by a moderator: Sep 25, 2017