Multiple Choice
When planning your financial goals, which of the following is the most important first step before investing in securities?
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7. Receivables and Investments
Introduction to Investments in Securities
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Which of the following is an example of an investment in securities?
A
Buying office supplies for daily use
B
Purchasing shares of common stock in another company
C
Paying employee salaries
D
Repaying a bank loan
Verified step by step guidance1
Understand the concept of 'investment in securities': Investments in securities refer to the purchase of financial instruments like stocks, bonds, or other marketable securities with the intention of earning a return or holding them for strategic purposes.
Analyze each option provided in the problem: Determine whether each option involves the purchase of a financial instrument or security.
Option 1: Buying office supplies for daily use - This is an operational expense and does not involve purchasing financial instruments, so it is not an investment in securities.
Option 2: Purchasing shares of common stock in another company - Shares of common stock are financial instruments, and purchasing them qualifies as an investment in securities.
Option 3: Paying employee salaries and Option 4: Repaying a bank loan - Both are operational or financing activities and do not involve purchasing financial instruments, so they are not investments in securities.
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