investment and portfolio investment.pptx

investment education

1. Chapter one Introduction to investment

2. General meaning of investment Investments in broad sense means the sacrifice of current birr in anticipation of a future benefit . It is current consumption that is sacrificed Investment is a sacrifice of current money or other resources in anticipation of a future benefits. Time, Risk and Future benefit

3. Cont … Investment is the commitment of money to purchase financial asset or real assets in order to gain profitable returns in the form of interest, dividend, or appreciation of the value of asset. risk return-benefit in terms of financial value only.

4. Characteristics of investment a) Return : is an expected income from the investment. It represents the benefits derived by an investor from his/her investments . Investments are made with the primary objective of deriving a return and the return can be received in the form of yield plus capital appreciation .

5. End of chapter 1

6. Chapter Two Regulations and administration of investments in Ethiopia by Mohammed M (MSc) 6

7. 2.1 Definition and Nature of Regulation What do we mean by regulation ? Regulation is a normative standard that should be obeyed, and a violator must be forced to comply where there is non-compliance Investment regulation may be defined as control of the government on investment Therefore , the main purpose of regulating investment is to ensure transparency and efficiency in the investment administration There are three types of regulation: market regulation industry regulation and government regulation by Mohammed M (MSc) 7

8. Cont’d Each type of regulation has its own advantages and drawbacks A market regulation is aimed at guaranteeing efficiency, flexibility, and low costs. However, market regulation provides uncertainty and instability for participants, notwithstanding that they are producers, employees, or consumers. Thus , market regulation has a drawback of instability and uncertainty because it is the market which leads the sector by Mohammed M (MSc) 8