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An investor is any party that makes an investment. Investors put money into something with the hope of profit. Investors commit money or capital to the purchase of financial instruments or other assets to gain profitable returns in the form of interest, income or appreciation of the value of the instrument. It is to saving or deferring consumption. Investors involve in many areas of the economy, such as business management and finance no matter for households, firms, or governments. Investors involve the choice by an individual or an organization to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives. It may be a foreign asset denominated in foreign currency that has certain level of risk and provides the possibility of generating returns over a period. Investment comes with the risk of the loss of the principal sum. The investment can be highly risky with respect to the investment owner because the possibility of losing money is not within the owner's control. The difference between speculation and investment can be subtle. It depends on the investment owner's mind whether the purpose is for lending the resource to someone else for economic purpose or not. In the case of investment, rather than store the good produced or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits. In the first case, the individual creates durable consumer goods, hoping the services from the good will make his life better. In the second, the individual becomes an entrepreneur using the resource to produce goods and services for others in the hope of a profitable sale. The third case describes a lender, and the fourth describes an investor in a share of the business. In each case, the consumer obtains a durable asset or investment, and accounts for that asset by recording an equivalent liability. As time passes, and both prices and interest rates change, the value of the asset and liability change. An asset purchase, or equivalently a deposit is in a bank, in hopes of getting a future return or interest from it. An asset expected to give returns without any work on the asset per se. Economists refer to a real investment, while financial economists refer to a financial asset, such as money put into a bank or the market, which may then be to buy a real asset. The investment decision is one of the fundamental decisions of business management: Managers determine the investment value of the assets that a business enterprise has within its control or possession. These assets may be physical, intangible, or financial. Assets are to produce streams of revenue that often are associated with particular costs or outflows. All together, the investor must determine whether the net present value of the investment to the enterprise is positive using the marginal cost of capital that is associated with the particular area of business.
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