Important Points for IC 89 - Management Accounting Exam
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Investment avenues basically come under two broad categories: Financial assets and Real Assets.
Investment avenues can be broadly classified into the following groups: Equity shares, Hybrid security like preference share, Bonds and debentures, Money market instruments, Mutual fund investments, Real estatem Financial derivative and Non marketable financial assets.
Selection of best investment avenue largely depends on evaluation and analysis of investment avenues. There are many criteria for evaluation of investment avenues, but following are the major criteria for evaluation: Rate of Return on Investment, Risk on Investment, Marketability of Investment, Tax Benefits on Investment, convenience of investment.
Marketability/Liquidity which allows investors to change their decisions and rectify possible errors or mistakes in earlier investment decision is very important factor for taking any investment decisions.
Certain investments enjoy tax benefits while others do not. Tax benefits make the investments more attractive and gainful. Tax Benefits are of three types: Initial tax benefit, Continuing Tax benefits and Terminal Tax Benefits.
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