BUS 325 | Chapter 2: Asset Classes and Financial Instruments
This chapter introduces the major asset classes and financial instruments available to investors and explains how each plays a role in the investment decision-making process. It provides a structured overview of the characteristics, risks, returns, and uses of different investment assets.
Chapter 2 helps students understand how financial instruments are classified, how they are traded in financial markets, and how they fit into a diversified investment portfolio. It lays the foundation for analyzing and comparing investment alternatives in later chapters.
By the end of this chapter, you will understand:
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The main asset classes (equities, fixed income, money market instruments, and alternative investments)
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The characteristics of common financial instruments such as stocks, bonds, and derivatives
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Risk and return features of different asset classes
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How financial instruments are used by investors and institutions
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The importance of asset allocation and diversification
This chapter is essential for developing a solid understanding of investment options and preparing students for more advanced investment analysis in the BUS 325 Investment course.