III. Investment Assets 投資資產

Money market instruments comprise bank deposits and negotiable short-term debt instruments, mainly used for short-term cash management and usually offering lower returns in exchange for lower risk and greater liquidity. Key examination points include the differences between deposits and bills, discount calculations, and inflation, reinvestment and default risks.

Bank Deposits · Negotiable Short-term Debt Instruments · Advantages and Disadvantages of Money Market Instruments

Bonds represent lending, with contractual coupon and principal payments; their value depends on market yield, credit quality and marketability. Preference shares give priority over ordinary shares but remain equity, and their dividends are not unconditionally guaranteed.

Investing in Debt Securities · Par Value · Convertibility · Coupon Rate · Term to Maturity · Pricing of Bond · Price and Yield Relationship · Yield Curve · Marketability · Bond Ratings · International Markets · Advantages of Bond Investment · Disadvantages of Bond Investment · Preferred Shares (Preference Shares)

Ordinary shares represent ownership in a company and offer dividend income and capital growth, alongside risks including fluctuating earnings, falling prices and total loss of capital. The material follows the supplied 2023 reference, with historical figures and arrangements identified accordingly.

Investing in Equities · Methods of Raising Equity · Why Invest in Equity · Bonus Issue · Dividend · Stock Exchange of Hong Kong (SEHK) · International Markets · Market Indexes · Fundamental Investment Analysis · Technical Analysis · Advantages of Equities · Disadvantages of Equities

Financial derivatives derive their value from an underlying asset or reference measure and can be used for hedging, speculation and arbitrage. Forwards and futures create obligations for both parties, while options give buyers a choice; leverage can magnify both gains and losses.

Uses of Financial Derivatives · Forward and Futures Contracts · Options and Warrants · Advantages of Derivatives · Disadvantages of Derivatives

Real estate can provide rental income and capital appreciation, together with an inflation hedge, mortgage leverage and pride of ownership. Candidates must also understand price risk, transaction costs, illiquidity, management problems, high denomination and low rental yield, without treating potential benefits as guarantees.

Advantages of Real Estate Investment · Disadvantages of Real Estate Investment

Collectibles such as antiques, art, coins, stamps and diamonds may offer financial returns and enjoyment, but their markets are illiquid and transaction costs can be high. These investments require specialist knowledge and expertise, and auction prices can vary considerably.

Investment funds pool investors’ money for professional management under stated objectives; their legal structure, dealing arrangements and charges affect investors’ rights and returns. Candidates must distinguish fund types and the parties’ responsibilities, and understand that diversification, asset custody and SFC authorisation do not guarantee capital or returns.

Mutual Fund and Unit Trust · Open-end and Closed-end Funds · Charges and Fees of Investment Funds · Benefits of Investment Funds · Disadvantages of Investment Funds · Roles of the Various Parties of an Investment Fund

Life insurance mainly addresses the financial consequences of premature death, while an annuity exchanges premiums for periodic income. Compare their payment conditions, duration, liquidity and exposure to inflation and longevity.

Life Insurance · Annuity