Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Why are equities generally considered more volatile than other types of investments?

Because their value is determined solely by the face value set at issuance.

Because they are insured by the government against losses.

Because they offer fixed interest payments regardless of market conditions.

Because their prices are influenced by frequent changes in market sentiment, company performance, and economic conditions.

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Verified step by step guidance

Understand the concept of equity investments: Equities represent ownership in a company, and their value is tied to the company's performance, market sentiment, and broader economic conditions.

Recognize the factors influencing equity prices: Unlike fixed-income investments, equity prices fluctuate based on company earnings, investor sentiment, and external economic factors such as interest rates and inflation.

Compare equities to other investments: Fixed-income securities like bonds offer predictable interest payments and are less affected by market sentiment, making them less volatile compared to equities.

Analyze the role of market sentiment: Equity prices can rise or fall rapidly due to changes in investor confidence, news about the company, or broader market trends, contributing to their volatility.

Conclude why equities are volatile: The frequent changes in market sentiment, company performance, and economic conditions make equities more susceptible to price fluctuations compared to other types of investments.