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Bibliography

Legea Republicii Moldova cu privire la investiiile n activitatea de ntreprinztor // Monitorul Oficial al Republicii Moldova nr. 64-66 din 23.04.2004 Strategia Republicii Moldova de atragere a investiiilor i promovare a exporturilor, aprobat prin Hotrrea Guvernului Nr. 234 din 13.10.2006// Monitorul oficial al Republicii Moldova nr.43-45 din 30.10.2006 Strategia Naional de Dezvoltare Moldova 2020 . Hncu R., Bunu M., Dascaliuc D. Lucrare metodico-didactic Bazele activitii investiionale (sinteze i aplicaii). Chiinu: Departamentul Editorial-Poligrafic al ASEM, 2010, 119 p. Caraganciu A., Domenti O., Ciobu S. Bazele activitii investiionale. Chiinu : Ed. ASEM, 2004. 320 p. Huru D. Investiiile: capital & dezvoltare. Bucureti: Editura Economic, 2007. Cistelecan L. M. Economia, eficiena i finanarea investiiilor. Bucureti : Ed. Economic, 2002. 536 p. Vasilescu I. Romnu I., Cicea C. Investiii. Bucureti: Ed. Economic, 2000.480p. Prvu D. Eficiena investiiilor. Bucureti: Ed. Lumina Lex, 2003. 291 p. Stoian M. Gestiunea investiiilor. Bucureti: Ed. A.S.E., 2003. .., .. . : , 2005. ., ., . . Chiinu, 2008. 305 p.
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Readings
Zvi Bodie, Kane Alex, Marcus Alan J. Essentials of Investments. The McGraw-Hill Companies, Inc. Boston, 2003 Marcus Alan J., Kane Alex, Zvi Bodie. Investments. The McGraw-Hill Companies, Inc. Boston, 2008 Brigham Eugene F., Gapenski Louis C. Financial management: theory and practice. The Dryden Press, 1999 Brealey, Meyers. Principles of Corporate Finance McGraw-Hill. 7ed, 2003 Banacu Cristian Silviu. Investments and risks for sustainable development. www.ase.ro Electronic Journals
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Topic 1. Concept and Principals of Investments


definition and fundamentals of investments, classification of investments, role of investments in the economic development

Key terms: capital investment, financial investment, intellectual investments, elements of investment, features of investment, domestic investments, foreign investments etc.
After Studying This Topic You Should Be Able to:
Define the investment Name the elements that identify an investment To characterize the main features of investment Distinguish between real investments and financial investments Confirm the role of investment for the development of businesses and of the national economy as a whole
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Investing - what is that exactly?


Probably you have heard many different definitions of investment. There are about 3 thousands definition However, what is the essence of it? The essence is very simple: investing a present sacrifice for the future.

Definition of investment
The general idea of investment is that the investor accepts not using the available resources today, so that he would have a higher amount of resources in the future. An investment may be defined as the purchase by an individual or institutional investor of a financial or real asset that produces a return proportional to the risk assumed over future investment period. In other words, investment represents the totality of financial and material resources allocated to create, modernize or extend the economic activity with the reason to earn profit.
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Investment definition may have several meanings, two most relevant:


1) An investment as a financial or tangible asset which is acquired on purpose to get a profit in the future. It is an instrument that promises some certain or uncertain return in the future. 2) An investment as a process (investing) when tangible or financial assets are acquired on purpose to earn more money (or other material benefits) than was spent when investment was made. If acquisition is made without an intention to profit from it, then it is spending but not an investment.

Definition of investment
The term investment, it carries slightly different meanings to different sectors. According to economists, investment is the utilization of resources in order to increase income or production output in the future. According to business theories, investment is that activity in which a manufacturer buys a physical asset, for example, stock or production equipment, in expectation that this will help the business to prosper in the long run. On the other hand, finance professionals define an investment as money utilized for buying financial assets, for example stocks, bonds, bullion, real properties, and precious items. According to finance, the practice of investment refers to the buying of a financial product or any valued item with an anticipation that positive returns will be received in the future. Accounting approach Psychological approach
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A formal definition of investment


can be specified as a current commitment of money for a period of time in order to derive future payments that will compensate the investor for (1) the time funds are committed and, (2) the expected rate of inflation, and (3) the uncertainty of the future payments. Similarly, this definition includes all types of investments, including investments made by corporations in plant and equipment, also the investment of individuals in stocks, bonds, commodities, or real estate.

Meaning of investment
In all cases the investor is trading a known money amount today for some expected future stream of payments that will be grater than the current outlay. So, results that investment is considered to be a present expenditure, realized for the purpose of future effects in risk and uncertainty conditions.
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The legal definition of investment


is formulated according to the Law of Republic of Moldova on investments in entrepreneurial activity nr. 81 from 23.04.2004. http://lex.justice.md/index.php?action=view&view= Investment is the aggregate amount of goods (assets) introduced in entrepreneurial activity on the territory of the Republic of Moldova, inclusiv on the basis of financial leasing contract, as well as within publicprivat partenership, for the purpose to obtain income;

Also the Law regulates the forms of investment. !!! Remember other key terms the Law specifies
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Elements of an investment
The subject of investment. An investor can be an individual, a government, a pension fund, or a corporation that is willing to invest its resources. The investment object, that represents the business, building, plant, equipment or real estate for what the investment is initiated; Investment cost, that represents the financial, material (machinery, raw material, production space, and land), human effort made for the realization of the respective investment etc. Effects of the investment, which the profit that is expected to be obtained by the end of the investments life span. The risk, meaning the uncertainty of the future payments, which represents the possibility that the investor wont receive his money or assets back or will receive them but at a lower value. The time funds are committed represents the period of time during which the money or assets wont be available to the investor.

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Present economic theory emphasizes a series of aspects related to the features of investment activity.
Investments are the opposite effect of immediate consumption. The relationship Investment-Time is a specific feature of investing activity. Investments have dual features:
Value sense when investment is viewed as an expense, and represents only a financial resource consumed in the present, with the goal of obtaining some future effects. Physical sense when investment is viewed as an action in which are involved material and technical means, people with the respective knowledge and abilities as well as their interests.

The novelty character that investment manifest, thus investments always deal with the future. Investment can generate spillover effects.

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Classification of investments
is realized in accordance to the some rational criteria: 1. By investment object or nature, there are: Financial Investments which represent any form of investing money for the purpose to obtain dividends, interests and profits Capital or Tangible Investments Nonmaterial or Intellectual Investments are money placements for research and development, personnel training, advertising, purchasing of know-how, licenses to use new technologies
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Capital Investment
As a term has two usages in business. Firstly, Capital Investment refers to money used by a business to purchase fixed assets, such as land, machinery, or buildings. Secondly, Capital Investment refers to money invested in a business with the understanding that the money will be used to purchase fixed assets, purchasing of plants, equipment, rather than used to cover the business' day-to-day operating expenses.

They are characterized by a long-term time period and high risk.

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2. According to the way of participation investments are:


Direct, those are equity investments such as acquisition of real assets or a stock package of a company, sometimes the acquisition of entire company or the establishment of its new subsidiaries. In case of the direct investment we suppose the possibility of control and decision over the activity of the enterprise. Portfolio or Indirect, that refers to investment in securities that is intended for financial gain only and does not create a lasting interest in or effective control over an enterprise The distinguishing elements: management and control over the company and the share of ownership in it.
Most investors interested in indirect investment would do so through a company or advisor who has experience in this type of investing.
Read more:
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3. According to the investment period, investments are:


Long- term investments Medium term investments Short- term investments (till 1 year).

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4. According to subject of investment or the


sourse of financing, investments are:
private or individual, corporate, public, foreign, which can be made with foreign capital, by a foreign investor participation, or as credits or grants offered by international financial institutions; mixed.
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5. From the point of view of the investment purpose (objective) there can be distinguished:

investment for productive needs, which are


replacement or maintenance investments; development or extension investments; investments for modernization or innovation;

strategic investments mandatory or obligatory investments.

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6. Depending on the placement region are:


domestic investments, foreign investments.
Foreign investments represent the resource and financial flows that cross juridical and economic boundaries.

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The role of investments in the economic development


role of investments at macroeconomic level role of investments at microeconomic level

INDIVIDUAL WORK

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