Which of the following is an example of financial investment?(1 point)
Responses
an individual purchases machinery to be used in production
an individual purchases machinery to be used in production
an individual purchases a brand new car to drive
an individual purchases a brand new car to drive
an individual purchases ice cream to be consumed immediately
an individual purchases ice cream to be consumed immediately
an individual purchases stock with the intent to sell it later at a higher price
an individual purchases stock with the intent to sell it later at a higher price
The example of financial investment among the given options is:
- An individual purchases stock with the intent to sell it later at a higher price.
The correct answer is: "an individual purchases stock with the intent to sell it later at a higher price."
To identify the example of financial investment, you need to understand that financial investment typically involves the allocation of funds with the intention of generating a return or profit in the future. In this case, an individual purchasing stock is an example of financial investment.
To arrive at this answer, you need to compare the options and evaluate each one based on its characteristics.
- The first option, "an individual purchases machinery to be used in production," does involve the purchase of an asset, but it is primarily for the purpose of production rather than generating financial returns.
- The second option, "an individual purchases a brand new car to drive," is not considered a financial investment since it does not typically generate a return or profit.
- The third option, "an individual purchases ice cream to be consumed immediately," is neither a financial investment nor an asset as it is a consumable product.
- Finally, the fourth option, "an individual purchases stock with the intent to sell it later at a higher price," aligns with the characteristics of financial investment. Stocks represent ownership in a company, and individuals buy them with the expectation of selling them at a later time for a higher price, thus making a profit.
By comparing the options and understanding the concept of financial investment, you can determine that purchasing stock with the intent to sell it later at a higher price is the example of financial investment among the given choices.