Your starting question

Which investment fits the purpose?

Different assets give different claims on cash, ownership and real resources. Compare their return mechanisms, risks and access before choosing for an owner.

By the end: Build and challenge a fictional charity allocation, including its cash needs and private-market commitments.

1 · Take a first view

Try the short baseline. Identify what you need to investigate.

2 · Explore and test

Use diagrams, worked examples and regular choices with feedback.

3 · Apply the tools

Work the case in your companion workbook and discuss the trade-offs.

4 · Review your judgement

Complete the review and record what changed your mind.

1.2 · Asset Classes

Identify the claim

Distinct investment claims with different return, risk and access paths.

Asset Classes · the work you will do

  1. 1Identify the claim
  2. 2Explain the return
  3. 3Test risks and access
  4. 4Check the mandate

Video coming soon · about 1 minutes

Welcome to Asset Classes

Use the narration below while the recording is being made, then try the decisions in this lesson.

Read the full narration

Welcome to On Judgement. In Asset Classes, we will follow four connected steps. Identify the claim. Then Explain the return. Then Test risks and access. Then Check the mandate. You do not need to know the answers before you start. Make an initial choice, read or watch the explanation, and use the feedback to reconsider. A mistake is useful when you can explain what it revealed. Work on the cases independently or discuss them with your club. Keep longer written responses for the parts where you need to make an argument of your own. By the end, use the evidence and calculations to explain a decision and what could change it.

Investing Fundamentals · Module 1.2

Know what you own.

Asset classes offer different claims, cash flows and uncertainties. Learn how each works, then put them together for an owner with real obligations in a fictional investment committee challenge.

How to use this module

Complete Module 1.1 first, then explore ten asset-class lessons before the Asset Owner Challenge. Each lesson includes a written explanation, worked example, three activities, jargon and ten checks. Read the lesson, work through the example, then apply what you have learned.

Use independently, in pairs, breakouts or with your teacher. Record your first response before opening feedback. Allow roughly 7–10 hours including activities and the committee challenge; allow time to discuss and review.

Before you start: ten baseline questions

This is a starting point, not a pass/fail test. Record uncertainties and revisit them at the end.

Check your understanding · choose one

A £4 coupon on a bond bought for £80 gives current yield of…

Correct. Current yield uses the purchase/current price, not face value.

Reconsider this choice. Current yield uses the purchase/current price, not face value. Try another answer.

Check your understanding · choose one

A buyout’s enterprise value and equity proceeds…

Correct. Debt, cash and other claims can change the bridge.

Reconsider this choice. Debt, cash and other claims can change the bridge. Try another answer.

Check your understanding · choose one

A private asset with infrequent valuations…

Correct. Smooth reporting does not establish low risk.

Reconsider this choice. Smooth reporting does not establish low risk. Try another answer.

Check your understanding · choose one

A £2m primary round at £8m pre-money gives new investors, in the simple case…

Correct. £2m divided by £10m post-money.

Reconsider this choice. £2m divided by £10m post-money. Try another answer.

Check your understanding · choose one

A commodity fund…

Correct. Funds can use different exposures.

Reconsider this choice. Funds can use different exposures. Try another answer.

Check your understanding · choose one

A floating-rate loan can create…

Correct. Rate exposure can move into borrower cash stress.

Reconsider this choice. Rate exposure can move into borrower cash stress. Try another answer.

Check your understanding · choose one

A toll road’s revenue depends on…

Correct. Price and volume both matter.

Reconsider this choice. Price and volume both matter. Try another answer.

Check your understanding · choose one

A simple short share position…

Correct. There is no specified upper bound to the share price.

Reconsider this choice. There is no specified upper bound to the share price. Try another answer.

Check your understanding · choose one

An MMF is…

Correct. Read holdings, structure, fees and settlement.

Reconsider this choice. Read holdings, structure, fees and settlement. Try another answer.

Check your understanding · choose one

An asset allocation should start with…

Correct. The owner’s requirements frame the choice.

Reconsider this choice. The owner’s requirements frame the choice. Try another answer.

What you will be able to do
  • Explain each asset’s claim, return drivers, risks and access routes.
  • Calculate returns, yields, ownership, leverage and fees under stated assumptions.
  • Build an asset-owner decision that respects liquidity and the mandate.

Review Module 1.1

1.2 Asset Classes

Explore ten asset classes, then build and defend an allocation for a fictional endowment. Worked examples, activities, jargon and an investment committee challenge.

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