The document discusses key concepts in investments including factors that influence investment choices such as financial risk, market risk, and interest rate risk. It also covers rates of return, capital gains advantages and limitations, diversification methods, measures of common stock value, and theories of common stock investment. Additional topics include real estate investments, real estate investment trusts, passive activity, and initial public offerings.

1. CPCU 556 Homework-Week 3
Basic Investment Objective Definition:
Factors in Choice of Investment (10)
Financial Risk
Market Risk
Interest Rate Risk (3)
Rates of Return (include the 4 equations)
Capital Gains Advantages (5)
1 Donna M. Kesot, CPCU
Copyright 2012© 4-1-2012

2. CPCU 556 Homework-Week 3
Capital Gain Limitations (3)
Average Annual Compound rate of total return
After Tax Total Return
3 methods of diversification
2 Donna M. Kesot, CPCU
Copyright 2012© 4-1-2012

3. CPCU 556 Homework-Week 3
5 Measures of value for common stocks
Dollar Cost Averaging
Margin Accounts
Selling Short
Defensive Stocks
Name 4 theories of common stock investment
3 Donna M. Kesot, CPCU
Copyright 2012© 4-1-2012

4. CPCU 556 Homework-Week 3
Degree of Risk
Bear Market
4 Donna M. Kesot, CPCU
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5. CPCU 556 Homework-Week 3
Operating Rate of Return
Disadvantages of real estate as an investment (4)
Advantages of real estate as an investment (6)
Real Estate Investment Trusts )REITs)
Real Estate Classifications (4)
Like-Kind Exchanges (AKA Section 1031)
Passive Activity
5 Donna M. Kesot, CPCU
Copyright 2012© 4-1-2012

6. CPCU 556 Homework-Week 3
IPOs
6 Donna M. Kesot, CPCU
Copyright 2012© 4-1-2012