Key Issues Current Financial Presentation (2)

Investing

Why individuals and businesses invest?

Profits Goals Money for retirement Skill and efficiency

Ways to finance investment

There are three ways of financing an investment: Savings Borrowing Sale of assets

 What are ethical investments? Social and environmental impacts

involved. Decisions made through peoples beliefs

and values creating products Socially or conscious responsible upon

the investment.

Outline a range of investment options

Shares Property Managed funds Superannuation

Risk and return for a range of investment options

Higher return results higher risk Lower return results lower risk Moderate return results moderate risks

Two expenses arising from a particular investment

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News

A KEY ISSUE RELATING TO INVESTMENT IN THE CURRENT FINANCIAL ENVIRONMENT -

MINING STOCKS

• Mining stock – safe investment?• Rio Tinto Limited – Australia’s largest iron ore

mining company• Rio – 13% fall in stock prices in 2014• S&P/ASX 200 shares up 2%• Reason – significant drop in iron ore prices

Mining StocksRisk factor

A company does well, an investor makes a profit.

A company does not perform as expected, an investor loses money.

Mine companies find good source of minerals, share prices rise and investor can make a lot of profit.

Mine companies find no minerals, investor loses money