INVESTMENT ANALYSIS AND PORFOLIO MANAGEMENT (FIN630) ASSIGNMENT # 01 SPRING SEMESTER 2008 Instructions:

Be specific and to the point while answering the question. No definitions and elaboration of terms are required in the solution. This assignment covers lesson No. 1-8. Last date for submission of assignment is 24th April, 2008. Give the answer according to question, no mark will be given for irrelevant material. Dont rely only on handouts, use other reference books also. Mention the source (bibliography) which you are using for preparing your assignment. Your own wording will be highly appreciated. Answer the assignment in MS Word 2003 format. Make sure that you upload the solution before due date. No assignment will be accepted through e-mail after the due date. Cheating or copying of assignment is strictly prohibited; No credit will be given to copied assignment. Once you upload the assignment on LMS, it will not be replaced under any condition. If you have taken help from internet websites, then do remember, it should be expressed in your own words.

Question:

Investors buy, hold and sell financial assets to earn returns on them. Within the spectrum of financial assets, why do some people buy common stocks instead of safely depositing their money in an insured saving account with a guaranteed minimum return? Describe the factors that investors keep in consideration while preferring investment in financial assets over saving.

Marks: 10