Principles of investment

Discussion in 'SP1' started by mossie, Sep 25, 2017.

  1. mossie

    mossie Active Member

    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
  2. Anna Walklate

    Anna Walklate ActEd Tutor Staff Member

    I personally would write the whole thing out to be sure of scoring the full 2 marks :)
     

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