Financial Investment Opportunities

Only available on StudyMode
  • Download(s) : 1215
  • Published : February 24, 2013
Open Document
Text Preview
Financial Investment Opportunities
o Kim Tuy n – Sally – F04-193

A report on
Investment and Taxation Decisions

Prepared for:
Ms Joey Lai (Lecturer)
Unit 39: Financial Investment Opportunities
Banking Academy, Hanoi
BTEC HND in Business (Finance)

Prepared by:
o Kim Tuy n – Sally – Class F04A
Registration No.: ITP F04-193
Submission Date: 21 November, 2012

1

Financial Investment Opportunities
o Kim Tuy n – Sally – F04-193

TABLE OF CONTENTS

INTRODUCTION ............................................................................................................. 3 Part 1. Range of investment available to individuals .................................................... 3 1.1 Assessment of the attitude of individuals to risk when evaluating the suitability of investments ............................................................................................................... 3 1.2 Evaluation of a range of investments available from banks, building societies, insurance companies and national savings ............................................................... 9 1.3 Analysis about the suitability of these products for different people .................. 11 Part 2. Understanding of how the UK system of taxation affects investment decisions12 2.1 Calculation of income tax payable for various individuals and couples ............. 12 2.2 Calculation of capital gains tax liabilities in different situations .......................... 14 2.3 Impacts of tax-free investments to different tax payers ..................................... 20 CONCLUSION .............................................................................................................. 22 REFERENCES .............................................................................................................. 23 APPENDIX .................................................................................................................... 25

2

Financial Investment Opportunities
o Kim Tuy n – Sally – F04-193

INTRODUCTION
Understanding the relationship between Risk and Reward is very important . It helps people make right choice which produce more gain than pain as an old saying „no pain, no gain‟. The point is how to have highest gain while having lowest pain. The ultimate aim is finding a comfort level to take risk and achieve targeted financial goal. All information used in this report is taken mostly from some finance and investment books of well-known professors.

Due to limitation of time, word count and knowledge, this report may not reach the expected requirement and have some unavoidable mistakes. On the other hand, it still meets the targeted aim and it is also a good opportunity for me to practice and widen knowledge. Many thanks are sincerely given to lecturer - Ms Joey Lai for helping me to finish this project.

Part 1. Range of investment available to individuals
1.1 Assessment of the attitude of individuals to risk when evaluating the suitability of investments
Bernd Rohrmann (2005) defines Risk as Loss, Uncertainty, Opportunity or Thrill. There are 6 types of risk in investments
-

Default risk

-

Political risk

-

Business risk

-

Liquidity risk

-

Market risk

-

Interest rate risk

Table 1. Types of investment risks

Investor needs a critical and strategic plan during investing. Evaluating individual risk tolerance is very important and a system is needed.
Individual risk tolerance definition: Investor risk tolerance (the dependent variable) referred to the maximum amount of investment risk someone wa s comfortable taking (Schaefer, 1978).
Risk tolerance includes: W illingness and Ability to take risk

3

Financial Investment Opportunities
o Kim Tuy n – Sally – F04-193

System which is used to evaluate Risk tolerance has 3 steps: -

Step 1. Background analysis

-

Step 2. Assessing Risk tolerance

-

Step 3. Classify investor group

Step 1....
tracking img