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What is the primary objective of an investment?
  • a)
    Generating income
  • b)
    Serving as a custodian of money
  • c)
    Issuing currency
  • d)
    Meeting daily expenses
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
What is the primary objective of an investment?a)Generating incomeb)Se...
Investment refers to acquiring assets with the objective of generating income or appreciation. Investors seek to earn returns on their investments, either through dividends, interest, or capital gains.
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What is the primary objective of an investment?a)Generating incomeb)Se...
Investment Objective

Generating income:
The primary objective of an investment is to generate income. When individuals or organizations invest their money, they do so with the intention of receiving returns on that investment in the form of income. This income can be in the form of interest, dividends, or capital gains.

Types of Income:
- Interest: This is the money earned on investments in fixed-income securities such as bonds or certificates of deposit.
- Dividends: This is the portion of a company's earnings that is distributed to its shareholders.
- Capital Gains: This is the profit made from selling an investment for more than its purchase price.

Goal of Investment:
By generating income through investments, individuals and organizations can grow their wealth over time, achieve financial goals such as retirement savings, and create a source of passive income. It allows them to make their money work for them and build a secure financial future. Additionally, income generated from investments can also help to offset inflation and provide a buffer against economic uncertainties.

Conclusion:
In conclusion, the primary objective of an investment is to generate income. By carefully selecting investment options and diversifying their portfolio, investors can maximize their income potential and work towards achieving their financial goals. It is important to consider factors such as risk tolerance, investment horizon, and financial objectives when making investment decisions.
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What is the primary objective of an investment?a)Generating incomeb)Serving as a custodian of moneyc)Issuing currencyd)Meeting daily expensesCorrect answer is option 'A'. Can you explain this answer?
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