Specifically address the following required elements 1) Distinguish between savings and investing (what's the difference, different types, what role can each play in your portfolio). 2) Discuss the...

1) Distinguish between savings and investing (what's the difference, different types, what
role can each play in your portfolio).
Solution:-
Many people know that savings and investment are two different things but most of them does
not know what is the difference. The difference between investment and savings lies in two
words:-
(i) Risk.
(ii) Liquidity.
Risk and liquidity are two factors which distinguish savings and investments with each other.
Let us explain the above mentioned criterions in respect of savings and investments.
Investment – In real purpose of investment is wealth building. Investments are known for their
higher returns as compared to savings, due to higher returns the risk involved is also higher.
Investments are always made for a longer period of time so that it can provide better results in
the long run and therefore liquidity factor is low in case of investment. Type of investments are
long term investment, short term investment etc.
Savings – Savings are low risk bearing funds which are made in order to meet unforeseen and
immediate requirement of the saver. Due to low returns offered in case of saving the risk is also
low, the main purpose of savings is to have funds ready to meet the unforeseen requirements of
the person saving the money. Types of savings are emergency funds, funds for purchasing
assets etc.
2) Discuss the importance of ethics when working with financial planning professions (you
can do some of this yourself, but you may also wish to hire a professional).
Solution:-
Being in financial planning profession the most important thing that should be practiced
diligently is accuracy and fairness in the financial statements. Often managers prepares financial
statements which does not represent the accurate financial details of the company, this is done to
deceive various investors. So as a manager of finance the most important duty which I would
fulfill is to represent all financial facts about the organization truly.
Fair reporting and management of investors fund is very important and ethical on part of
management in order to win the confidence of various stakeholders. Mismanagement of funds
and reporting is sometimes also known as window dressing which is done to attract the investors
and customers. Companies sometimes manipulate their financial data in order to better their
financial statements, there are several ways of window dressing such as using FIFO method of
inventory which will increase the profit figures, Categorizing current expenses as long lived
expense which will lead to increase in profit figures, Categorizing short term current liabilities as
Long term current liabilities...