INVESTMENT: A commitment of funds made in the expectation of some positive rate of return.

It is an activity that is engaged in by people who have savings Eg. 1. If one person has advanced some money to another he may consider his loan as an investment. He expects to get back the money along with the interest at a future date. INVESTMENT DEFINITION The purchase by an individual or institutional investor of a financial or real asset that produces a return proportion to the risk assumed over some future investment period.

FINANCIAL AND ECONOMIC MEANING OF INVESTMENT Financial: Investment is the commitment of a persons funds to derive future income in the form of interest, dividend, premium, pension benefits or appreciation in the value of their capital Eg. Purchase of shares, debentures, post office savings certificates, insurance policies. Economic: Investment means the net additions to the economys capital stock which consists of goods and services that are used in production of other goods and services. Eg. Formation of new and productive capital in the form of new constructions, plant and machineries, inventories etc.

PORTFOLIO A portfolio is a combination of securities. It is a combinations of assets Portfolios will consist of collection of securities A group of securities is Called portfolio. PORTFOLIO MANAGEMENT Portfolio management deals with the analysis of individual securities as well as with the theory and practice of optimally combining securities into portfolios. An investor who understands the fundamental principles and analytical aspects of portfolio management has a better chance of success.
TYPES OF FINANCIAL MARKET 1. PRIMARY MARKET 2. SECONDARY MARKET

1. Primary Market It is the market where new issues of securities are offered to the investors. 2. Secondary Market An investor of a secondary market buys a security from another participant of the same and not from any issuing corporation (as in case of Primary Market)