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    Question

    What is

    Investment?
    A It is a capital formation. Correct Answer Incorrect Answer
    B It is a gross addition to capital stock. Correct Answer Incorrect Answer
    C It is a net addition to capital stock. Correct Answer Incorrect Answer
    D All of the above Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Investment : An investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit. It is oriented toward future returns, and thus entails some degree of risk. It is a gross or net addition to capital stock and is always capital formation. A measure of the final output, which comprises capital goods, constitutes the Gross Investment of an economy. It does not denote the purchase of shares or property or even having an insurance policy. Common forms of investment include financial markets (e.g. stocks and bonds), credit (e.g. loans or bonds), assets (e.g. commodities or artwork), and real estate.

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