The motion picture industry

Investment:

The commitment of funds in one or more assets that will be held over some future time period.

The time period can be a month, a year or even more based on the nature of investment.

What is investments?

The process and the study of investment is called investments.

Assets and its types:

Assets:

An asset is something containing economic value and/or future benefit. An asset can often generate cash flows in the future, such as a piece of machinery, a financial security, or a patent.

Types of assets:

Financial assets:

Financial assets are paper claims against the issuer.

In financial assets we have shares, bonds and marketable securities.

Types of financial assets:

MARKETABLE:- Marketable assets are those financial assets which are easily and cheaply traded in the organized market.

Example:- Bonds, Shares etc.

Non Marketable:- Which are not traded in the organized market.

Example:- Fixed Account.

Real investment:

Physical Assets are known are real assets.

EXAMPLE: Gold, House etc.

Types of real assets:

Fixed assets:

It includes gold house etc

Current assets:

Cash ,a/c receivable

Why do we invest?

· To earn profit.

· Charity

· To improve our welfare

· To avoid opportunity cost

· To decrease the purchasing power for time being

· Invest for maximum return

Return and its types:

EXPECTED RETURN:- The extant return expected by investor over some future holding period is known as Expected Return.

REALIZED RETURN:- The actual return on an investment for some future period of time is called realized return.

Risk:

DEFINITION:- Risk is a chance that the realized return will be different from the expected return.

RISK PREMIUM:- The additional composition dine due to risk is known as risk premium.

Risk is never equal to zero

Types of risk:

Systematic risk:

The risk which cannot be controlled is known as systematic risk.

Example:- Market, Interest rate, Inflation risk etc.

Non systematic risk:

Those risks which can be controlled are known as Non Systematic Risk.

EXAMPLE:- Event risk, Default risk, Exchange rate risk, political risk etc.

Strategies for investment:

· Active Strategy

· Passive Strategy

Active strategy:

In active strategy the investors are actively participating and they are making day to day change in the portfolio.

Passive strategy:

It is also known as the buy and hold strategy.

This strategy is implemented due lack/shortage of time and for the purpose of avoiding the transaction cost.

Direct indirect investment:

Direct investment:

It is the investment in which the investor is directly involved to buy and sell of a security through brokerage account.

Indirect investment:

The buying and selling of securities.