T.P.

Mtonda

INVESTMENT MANAGEMENT
1

INTRODUCTION
Definition

of investment management Overview of financial markets and financial institutions Buying and selling securities Securities Introduction to Mutual Funds

Stock Markets Operations of stock market Common Stock valuation Earnings and Cash Flow Analysis Stock Price Behaviour and Market

Interest Rates and Bond Markets Interest Rates Bond Prices and Yields Corporate Bonds Government Bonds Mortgage-backed Securities

Options and Futures Stock Options Option Valuation Futures Contracts

Portfolio Management Diversification and Asset Allocation Return, Risk and the Security Market Line Performance Evaluation and Risk Management

WHAT IS AN INVESTMENT

Current commitment of resources for a period of time in the expectation of receiving future resources that will compensate the investor for The time the resources are committed The expected rate of inflation The risk- the uncertainty of future payments It is important to note that the investor is trading a known for an expected hoping it will be greater that the present sacrifice
7

TIME VALUE OF MONEY

A dollar today is worth more to us than the same dollar in future A bird is hand is better that 2 in the bush Fodya wa mmanja ndi wa mphepo There are three reasons why money has a time value Pure or real risk-free interest rate We expect a reward for postponing spending Inflation protection Inflation is the rate of increment in costs of items Risk Reduced payment, promise broken so on and so forth
8

REASONS FOR INVESTING

Income Annuities or bond e.g. old mutual and Nico annuities Capital preservation This is just to preserve the principal Capital appreciation Made to grow the investment say to pay childrens fees

10