Consistency, simplicity, the risk-return relationship, investment objectives, diversification are the five basic investment considerations. Question 5 options:

True

False

True

Explanation:

There are five basic investment considerations:

Consistency : This particularly refers to the income which comes from investment as it shall be consistent.

Simplicity : The investment shall not be complicated in nature and shall be based on simple calculations and understandings.

Risk Return relationship : This basically demonstrates that the relationship in between the risk associated with investment and that of return shall be identified and measured properly.

Investment objectives: These play a major role, as an investor one shall clearly identify why he wants to invest and what he wants to invest, before investing.

Diversification : Does the investment provide for diversification meaning variety of investments as sub parts of major investment.