Solution Manual for Fundamentals of Investing 12th Edition by Smart
Chapter 1
The Investment Environment
Outline
Learning Goals I. Investments and the Investment Process
A. Attributes of Investments
1. Securities or Property
2. Direct or Indirect
3. Debt, Equity, or Derivative Securities
4. Low- or High-Risk Investments
5. Short- or Long-Term Investments
6. Domestic or Foreign
B. The Structure of the Investment Process
1. Suppliers and Demanders of Funds a. Government b. Business c. Individuals
2. Types of Investors
Concepts in Review II. Types of Investments
A. Short-Term Investments
B. Common Stock
C. Fixed-Income Securities
1. Bonds
2. Convertible Securities
3. Preferred Stock
D. Mutual Funds
E. Exchange-Traded Funds
F. Hedge Funds
G. Derivative Securities
1. Options
2. Futures
H. Other Popular Investments
Concepts in Review
III. Making Investment Plans
A. Steps in Investing
1. Step 1: Meet Investment Prerequisites
2. Step 2: Establish Investment Goals
3. Step 3: Adopt an Investment Plan
4. Step 4: Evaluate Investments
5. Step 5: Select Suitable Investments
6. Step 6: Construct a Diversified Portfolio
7. Step 7: Manage the Portfolio
B. Considering Personal Taxes
1. Basic Sources of Taxation
2. Types of Income
a. Ordinary Income
b. Capital Gains and Losses
3. Investments and Taxes
4. Tax-Advantaged Retirement Savings Plans
C. Investing over the Life Cycle
D. Investments and the Business Cycle
Concepts in Review
IV. Meeting Liquidity Needs with Short-Term Investments
A. Role of Short-Term Investments
1. Interest on Short-Term Investments
2. Risk Characteristics
3. Advantages and Disadvantages of Short-Term Investments
B. Common Short-Term Investments
C. Investment Suitability
Concepts in Review
V. Careers in Finance
A. Commercial Banking
B. Corporate Finance
C. Financial Planning
D. Insurance
E. Investment Banking
F. Investment Management
Concepts in Review
Summary
Key Terms
Discussion Questions
Problems
Case Problems
1.1 Investments or Golf?
1.2 Preparing Carolyn Bowen’s Investment Plan
Excel with Spreadsheets
The Investment Environment
Outline
Learning Goals I. Investments and the Investment Process
A. Attributes of Investments
1. Securities or Property
2. Direct or Indirect
3. Debt, Equity, or Derivative Securities
4. Low- or High-Risk Investments
5. Short- or Long-Term Investments
6. Domestic or Foreign
B. The Structure of the Investment Process
1. Suppliers and Demanders of Funds a. Government b. Business c. Individuals
2. Types of Investors
Concepts in Review II. Types of Investments
A. Short-Term Investments
B. Common Stock
C. Fixed-Income Securities
1. Bonds
2. Convertible Securities
3. Preferred Stock
D. Mutual Funds
E. Exchange-Traded Funds
F. Hedge Funds
G. Derivative Securities
1. Options
2. Futures
H. Other Popular Investments
Concepts in Review
III. Making Investment Plans
A. Steps in Investing
1. Step 1: Meet Investment Prerequisites
2. Step 2: Establish Investment Goals
3. Step 3: Adopt an Investment Plan
4. Step 4: Evaluate Investments
5. Step 5: Select Suitable Investments
6. Step 6: Construct a Diversified Portfolio
7. Step 7: Manage the Portfolio
B. Considering Personal Taxes
1. Basic Sources of Taxation
2. Types of Income
a. Ordinary Income
b. Capital Gains and Losses
3. Investments and Taxes
4. Tax-Advantaged Retirement Savings Plans
C. Investing over the Life Cycle
D. Investments and the Business Cycle
Concepts in Review
IV. Meeting Liquidity Needs with Short-Term Investments
A. Role of Short-Term Investments
1. Interest on Short-Term Investments
2. Risk Characteristics
3. Advantages and Disadvantages of Short-Term Investments
B. Common Short-Term Investments
C. Investment Suitability
Concepts in Review
V. Careers in Finance
A. Commercial Banking
B. Corporate Finance
C. Financial Planning
D. Insurance
E. Investment Banking
F. Investment Management
Concepts in Review
Summary
Key Terms
Discussion Questions
Problems
Case Problems
1.1 Investments or Golf?
1.2 Preparing Carolyn Bowen’s Investment Plan
Excel with Spreadsheets