{"id":502,"date":"2023-12-19T19:53:07","date_gmt":"2023-12-19T19:53:07","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/accinvestments\/?post_type=chapter&#038;p=502"},"modified":"2023-12-19T19:53:07","modified_gmt":"2023-12-19T19:53:07","slug":"chapter-1-summary","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/accinvestments\/chapter\/chapter-1-summary\/","title":{"raw":"Chapter 1 Summary","rendered":"Chapter 1 Summary"},"content":{"raw":"<p class=\"lt-biz-79467\"><strong>Congratulations \u2012 You Have Finished Chapter 1 \u2012 Introduction, Overview, and\u00a0Risk\u00a0versus Return<\/strong><\/p>\r\n<p class=\"lt-biz-79467\">You have reached the end of chapter 1, Introduction, Overview, and\u00a0Risk\u00a0versus Return. In this chapter, you have:<\/p>\r\n\r\n<ul>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Been introduced to the definition of an investment and the basic characteristics of investments \u2012 You now know what a prudent investment is! An investment is any vehicle that we can place resources into with the reasonable expectation of income, aka cash flow, or growth, aka capital\u00a0gains, or both<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Reviewed the major asset investment alternatives \u2012 Overview of the Investment\u00a0Universe<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Explored the relationship of risk\u00a0and return \u2012 Do you want to eat well or do you want to sleep well?<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Identified the differences between an investor and a speculator\/trader<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Investigated short-term \u201ccash\u201d investment\u00a0alternatives \u2012 A Place to Park Your Money<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Discussed aspects of short-term\u00a0\u201ccash\u201d investments with your fellow students<\/li>\r\n<\/ul>\r\n<p class=\"lt-biz-79467\">You should now be able to:<\/p>\r\n\r\n<ol>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Given a typical investment, identify its characteristics including the cash flow (income) and capital gains (growth) components, and identify the advantages and disadvantages of the investment<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">In a brief two- to three-sentence description, succinctly describe the major investment alternatives including stocks, bonds, mutual funds, and short-term \u201ccash\u201d investments<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Explain the historical relationship of risk and return \u2012 Do you want to eat well or do you want to sleep well?<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Research short-term \u201ccash\u201d investment alternatives including demand deposit accounts such as savings accounts, Certificates of Deposits, money market accounts and money market mutual funds, and Treasury Bills<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Describe institutional short-term investment alternatives such as corporate paper and banker's acceptance notes<\/li>\r\n \t<li class=\"lt-biz-79467\" role=\"presentation\">Optionally, calculate the future values of a lump sum principal investment and a series of investments<\/li>\r\n<\/ol>\r\n<p class=\"lt-biz-79467\">We told you not to worry, right? It was not that hard, was it? If you are still a bit fuzzy on some topics, that is okay. Go back and read the text and listen and watch the presentations again. Much of the task of learning about investments is just getting past the odd and strange names that we hear all the time on the television but don\u2019t really know what they are talking about. Well, now you know more about what they are talking about, don\u2019t you?<\/p>\r\n<p class=\"lt-biz-79467\"><strong>Your Feedback, Please<\/strong><\/p>\r\n<p class=\"lt-biz-79467\">Are you getting an education about investments? We hope so! Our goal is for this class to be one of the few classes that you remember 10 or 20 or more years from now. We hope that you can say to yourself, \u201cYa\u2019 know, that Introduction to Investments class really helped me.\u201d There is also a\u00a0<a class=\"link-https\" title=\"https:\/\/wonderprofessor.com\/chat\/\" href=\"https:\/\/wonderprofessor.com\/chat\/\" target=\"_blank\" rel=\"external noopener nofollow\">free chat group<\/a>\u00a0consisting of individuals who are using the concepts, techniques, and skills we learn in our class. Come join us! Perhaps you might want to start your own journal to help you organize your learning process using your computer or mobile device. We welcome any and all questions, comments, criticisms, suggestions, complaints, etc. We want you to be the best investors the world has ever seen!<\/p>\r\n<p class=\"lt-biz-79467\">In our next chapter, we will investigate Mutual Funds: Investments for the Masses. The chances are very high that you will have a job with a company that offers you some kind of employer-sponsored retirement plan. That plan will almost certainly have mutual funds as the\u00a0investment\u00a0alternatives. As we will see, there are more mutual funds in the\u00a0investment\u00a0universe than visible stars in the night sky. (There are\u00a0<a class=\"link-https\" title=\"https:\/\/skyandtelescope.org\/astronomy-blogs\/how-many-stars-night-sky-09172014\/\" href=\"https:\/\/skyandtelescope.org\/astronomy-blogs\/how-many-stars-night-sky-09172014\/\" target=\"_blank\" rel=\"external noopener nofollow\">about 9,000 visible stars in the sky<\/a>. There are approximately 12,000 mutual funds.) Choosing a\u00a0mutual fund\u00a0is extremely difficult, especially for those who have had no training or experience whatsoever. You, Dear Students, are going to be the\u00a0Investment\u00a0Gurus for your family, friends, and fellow co-workers. You Can\u2019t Let Them Down! Thank you so very much for being in our class and we will see you in our next chapter.<\/p>\r\n\r\n<footer class=\"mt-content-footer\">\r\n\r\n<hr class=\"autoattribution-divider\" \/>\r\n\r\n<div class=\"autoattribution\">\r\n\r\nThis page titled\u00a0<a class=\"internal mt-self-link\" href=\"https:\/\/biz.libretexts.org\/Bookshelves\/Finance\/Introduction_to_Investments_(Paiano)\/01%3A_Chapter_1\/01%3A_Introduction_Overview_and_Risk_versus_Return\/1.S%3A_Summary\" target=\"_blank\" rel=\"internal noopener\">1.S: Summary<\/a>\u00a0is shared under a\u00a0<a href=\"https:\/\/creativecommons.org\/licenses\/by-nc-sa\/4.0\" target=\"_blank\" rel=\"nofollow noopener\">CC BY-NC-SA 4.0<\/a>\u00a0license and was authored, remixed, and\/or curated by\u00a0<a href=\"https:\/\/wonderprofessor.com\/\" target=\"_blank\" rel=\"nofollow noopener\">Frank Paiano<\/a>.\r\n\r\n<\/div>\r\n<\/footer>","rendered":"<p class=\"lt-biz-79467\"><strong>Congratulations \u2012 You Have Finished Chapter 1 \u2012 Introduction, Overview, and\u00a0Risk\u00a0versus Return<\/strong><\/p>\n<p class=\"lt-biz-79467\">You have reached the end of chapter 1, Introduction, Overview, and\u00a0Risk\u00a0versus Return. In this chapter, you have:<\/p>\n<ul>\n<li class=\"lt-biz-79467\" role=\"presentation\">Been introduced to the definition of an investment and the basic characteristics of investments \u2012 You now know what a prudent investment is! An investment is any vehicle that we can place resources into with the reasonable expectation of income, aka cash flow, or growth, aka capital\u00a0gains, or both<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Reviewed the major asset investment alternatives \u2012 Overview of the Investment\u00a0Universe<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Explored the relationship of risk\u00a0and return \u2012 Do you want to eat well or do you want to sleep well?<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Identified the differences between an investor and a speculator\/trader<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Investigated short-term \u201ccash\u201d investment\u00a0alternatives \u2012 A Place to Park Your Money<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Discussed aspects of short-term\u00a0\u201ccash\u201d investments with your fellow students<\/li>\n<\/ul>\n<p class=\"lt-biz-79467\">You should now be able to:<\/p>\n<ol>\n<li class=\"lt-biz-79467\" role=\"presentation\">Given a typical investment, identify its characteristics including the cash flow (income) and capital gains (growth) components, and identify the advantages and disadvantages of the investment<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">In a brief two- to three-sentence description, succinctly describe the major investment alternatives including stocks, bonds, mutual funds, and short-term \u201ccash\u201d investments<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Explain the historical relationship of risk and return \u2012 Do you want to eat well or do you want to sleep well?<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Research short-term \u201ccash\u201d investment alternatives including demand deposit accounts such as savings accounts, Certificates of Deposits, money market accounts and money market mutual funds, and Treasury Bills<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Describe institutional short-term investment alternatives such as corporate paper and banker&#8217;s acceptance notes<\/li>\n<li class=\"lt-biz-79467\" role=\"presentation\">Optionally, calculate the future values of a lump sum principal investment and a series of investments<\/li>\n<\/ol>\n<p class=\"lt-biz-79467\">We told you not to worry, right? It was not that hard, was it? If you are still a bit fuzzy on some topics, that is okay. Go back and read the text and listen and watch the presentations again. Much of the task of learning about investments is just getting past the odd and strange names that we hear all the time on the television but don\u2019t really know what they are talking about. Well, now you know more about what they are talking about, don\u2019t you?<\/p>\n<p class=\"lt-biz-79467\"><strong>Your Feedback, Please<\/strong><\/p>\n<p class=\"lt-biz-79467\">Are you getting an education about investments? We hope so! Our goal is for this class to be one of the few classes that you remember 10 or 20 or more years from now. We hope that you can say to yourself, \u201cYa\u2019 know, that Introduction to Investments class really helped me.\u201d There is also a\u00a0<a class=\"link-https\" title=\"https:\/\/wonderprofessor.com\/chat\/\" href=\"https:\/\/wonderprofessor.com\/chat\/\" target=\"_blank\" rel=\"external noopener nofollow\">free chat group<\/a>\u00a0consisting of individuals who are using the concepts, techniques, and skills we learn in our class. Come join us! Perhaps you might want to start your own journal to help you organize your learning process using your computer or mobile device. We welcome any and all questions, comments, criticisms, suggestions, complaints, etc. We want you to be the best investors the world has ever seen!<\/p>\n<p class=\"lt-biz-79467\">In our next chapter, we will investigate Mutual Funds: Investments for the Masses. The chances are very high that you will have a job with a company that offers you some kind of employer-sponsored retirement plan. That plan will almost certainly have mutual funds as the\u00a0investment\u00a0alternatives. As we will see, there are more mutual funds in the\u00a0investment\u00a0universe than visible stars in the night sky. (There are\u00a0<a class=\"link-https\" title=\"https:\/\/skyandtelescope.org\/astronomy-blogs\/how-many-stars-night-sky-09172014\/\" href=\"https:\/\/skyandtelescope.org\/astronomy-blogs\/how-many-stars-night-sky-09172014\/\" target=\"_blank\" rel=\"external noopener nofollow\">about 9,000 visible stars in the sky<\/a>. There are approximately 12,000 mutual funds.) Choosing a\u00a0mutual fund\u00a0is extremely difficult, especially for those who have had no training or experience whatsoever. You, Dear Students, are going to be the\u00a0Investment\u00a0Gurus for your family, friends, and fellow co-workers. You Can\u2019t Let Them Down! Thank you so very much for being in our class and we will see you in our next chapter.<\/p>\n<footer class=\"mt-content-footer\">\n<hr class=\"autoattribution-divider\" \/>\n<div class=\"autoattribution\">\n<p>This page titled\u00a0<a class=\"internal mt-self-link\" href=\"https:\/\/biz.libretexts.org\/Bookshelves\/Finance\/Introduction_to_Investments_(Paiano)\/01%3A_Chapter_1\/01%3A_Introduction_Overview_and_Risk_versus_Return\/1.S%3A_Summary\" target=\"_blank\" rel=\"internal noopener\">1.S: Summary<\/a>\u00a0is shared under a\u00a0<a href=\"https:\/\/creativecommons.org\/licenses\/by-nc-sa\/4.0\" target=\"_blank\" rel=\"nofollow noopener\">CC BY-NC-SA 4.0<\/a>\u00a0license and was authored, remixed, and\/or curated by\u00a0<a href=\"https:\/\/wonderprofessor.com\/\" target=\"_blank\" rel=\"nofollow noopener\">Frank Paiano<\/a>.<\/p>\n<\/div>\n<\/footer>\n","protected":false},"author":33,"menu_order":7,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-502","chapter","type-chapter","status-publish","hentry"],"part":485,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/pressbooks\/v2\/chapters\/502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/wp\/v2\/users\/33"}],"version-history":[{"count":1,"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/pressbooks\/v2\/chapters\/502\/revisions"}],"predecessor-version":[{"id":503,"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/pressbooks\/v2\/chapters\/502\/revisions\/503"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/pressbooks\/v2\/parts\/485"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/pressbooks\/v2\/chapters\/502\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/wp\/v2\/media?parent=502"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/pressbooks\/v2\/chapter-type?post=502"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/wp\/v2\/contributor?post=502"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accinvestments\/wp-json\/wp\/v2\/license?post=502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}