INVESTMENT 1.

Limit order : An order in a market such as a stock market, bond market, commodity market or financial derivative market is an instruction from a customer to a broker to buy or sell on the exchange. These instructions can be simple or complicated. There are some standard instructions for such orders Stop order: an order to a broker to sell (buy) when the price of a security falls (rises) to a designated level 2. An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features. ETFs are the most popular type of exchange-traded product. Exchange Traded Funds (ETFs) have recently become somewhat popular. At their heart, they are basically just index mutual funds which are bought and sold as stocks. In that way, they are similar to closed-end mutual funds which happen to be index funds. However, they have several interesting features which make them more similar to conventional (open-end) index mutual funds. Many investors choose to have distributions of conventional mutual funds automatically reinvested in additional shares of the fund. This is convenient it keeps your money working for you without requiring extra effort on your part to redeploy the distributions 3. Types of Mutual fund 1. Money market funds These funds invest in short-term fixed income securities such as government bonds and treasury bills. They are generally a safe investment, but you cant expect your money to grow quickly. 2. Fixed income funds These funds buy investments that pay a fixed rate of return like government and corporate bonds, and mortgages. They aim to have money coming into the fund on a regular basis, mostly through interest that the fund earns. They are usually riskier than money market funds, and the price can go up and down. 3. Mortgage funds These funds invest in mortgages to create income for investors. The income comes from the payments the mortgage holders make. Mortgage funds usually offer a

higher level of interest income than bonds and other fixed income investments due to the default risk of mortgages. The type of mortgage varies, based on the objectives of the fund. Examples: insured or government-guaranteed first mortgages on family homes and other properties, mortgages on residential and commercial properties. 4. Growth or equity funds These funds invest in equities like stocks and income trusts. These funds aim to grow faster than money market or fixed income funds, so there is usually a higher risk that you could lose money. 5. Balanced funds These funds invest in a mix of equities and fixed income securities. They try to balance the aim of achieving higher returns against the risk of losing money. Most of these funds follow a formula to split money among the different types of investments. They tend to have more risk than fixed income funds, but less risk than pure equity funds. 6. Index funds These funds invest in equities or fixed income securities chosen to mimic a specific index such as the S&P/TSX Composite Index. The value of the units or shares of the fund will go up or down as the index goes up or down. Some funds may track a large number of the investments on an index, or a selection of the investments. Index funds typically have lower costs than actively managed funds because the portfolio manager doesnt have to do as much research or make as many investment decisions. 4. Real interest rate : The real interest rate is the rate of interest an investor expects to receive after allowing for inflation. Nominal interest rate : Nominal interest rate or nominal rate of interest refers to two distinct things: the rate of interest before adjustment for inflation (in contrast with the real interest rate); or, for interest rates "as stated" without adjustment for the full effect of compounding (also referred to as the nominal annual rate). 5. Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money a loss of real value in the medium of exchange and unit of account within the economy. A chief measure of price inflation

is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time. 6. Simple interest : Interest computed only on the principal and (unlike compound interest) not on principal plus interest earned or incurred in the previous period. Compound interest : Compound interest arises when interest is added to the principal of a deposit or loan, so that, from that moment on, the interest that has been added also earns interest. Present value : is a future amount of money that has been discounted to reflect its current value, as if it existed today. The present value is always less than or equal to the future value because money has interest-earning potential, a characteristic referred to as the time value of money. Future value : Future value is the value of an asset at a specific date. It measures the nominal future sum of money that a given sum of money is "worth" at a specified time in the future assuming a certain interest rate, or more generally, rate of return; it is the present value multiplied by the accumulation function. 7. a) simple interest= P x I x N
P= Principal (Otiginal amount borrowe) I= Interest rate for a period N= Number of period = 10.000.000 x 0.1 x 3 = 3.000.000 b) compound intetest year 1= P x I x N = 10.000.000 x 0.1 x1 =1.000.000 year 2= (P2= P1 + I1) x I x N = (10.000.000 + 1.000.000) x 0.1 x 1 = 1.100.000 year 3= (P3= P2 + I2) x I x N = (11.000.000 + 1.100.000) x 0.1 x 1 = 1.210.000 Total interest rate earned over 3 years= 1.000.000 + 1.100.000 + 1.210.000 = 3.310.000

8. Stock split : A stock split or stock divide increases the number of shares in a public company. The price is adjusted such that the before and after market capitalization of the

company remains the same and dilution does not occur. Options and warrants are included.

Indonesia's Top Telecommunication Company Telkom Conducts Stock Split

30 August 2013 | Indonesia Investments Subjects | Company Profile, Indonesia Stock Exchange, Internet, Media, Mobile Phone, Quantitative Easing, SOE, Stock Split, Telecommunication, Telekomunikasi Indonesia, Telephone, Telkom, Telkom Group, TLKM

Indonesia's largest telecommunication & network provider Telekomunikasi Indonesia (Telkom) has conducted a stock split with a ratio of 1:5 yesterday (29/08). The company, which is majority owned by the Indonesian government and has a dominating market share of around 47% in terms of mobile phone subscribers in Indonesia, decided to conduct the stock split to increase the companys share liquidity. A cheaper price will be more appealing to investors. The stock split was agreed upon at the general shareholders' meeting on 19 April 2013. In 2013 (up to 28 August 2013), Telkom's shares have risen 12.8 percent, which is a much better performance than Indonesia's general index (IHSG), which fell 5.57 percent this year so far up to 29 August 2013 amid global turmoil after the Federal Reserve announced to be planning to cut its massive quantitative easing program towards the end of this year. This QE3 program had resulted in the inflow of many cheap funds into emerging markets, such as Indonesia. Telkom is one of the largest Indonesian companies in terms of market capitalization. It is the parent company of the Telkom Group, which is engaged in a range of businesses that include telecommunication, multimedia, property and finance services.