Order the parable of the talents discussion
Please reply to this thread in 450 to 500 words and include 2 peer-reviewed references and one biblical integration.
Parable of the Talents
Order the parable of the talents discussion
In this well-known parable, three servants were entrusted a certain amount of wealth while the master went away for a period of time. The first two servants had invested and doubled what they were given. As a result, the master said to them, “Well done, good and faithful servant…Enter into the joy of your master.” (Matthew 25:21, English Standard Version Bible, 2001). The third servant, being afraid from the risk of investments, buried his talents in the ground, for which the master scolded him, “You wicked and slothful servant!”, then proceeded to kick him out of his sight. (Matthew 25:26, English Standard Version Bible, 2001).
Each of us are given possessions to be managed on behalf of God’s will. We ought to learn from the examples of the first two servants and avoid the mistakes made by the third. In the end, we will be accountable for how we have handled what we were given in this world. This highlights the importance of learning and understanding the different investment instruments and classes.
Order the parable of the talents discussion
Money Market Instruments
Money market instruments are composed of very short-term debt securities. Some examples include certificates of deposit, commercial paper, and banker’s acceptances. Overall, money market instruments are considered very low risk investments with almost guaranteed rates of return. The U.S. treasury bills, for example, are “the most marketable of all money market instruments” (Bodie, 2022). This is because the debt obligation is backed by the U.S. government and the only way T bills will go bad is if the government defaults.
Fixed-Income/Bond Instruments
The bond market consists of options such as municipal bonds, corporate bonds, and mortgage-backed securities. One advantage of bond instruments such as municipal bonds is special tax exemptions. Interest payments on these bonds are exempt from income taxes. One major consideration when choosing to invest in bonds is opportunity cost. Since bonds are generally required to be held for a predetermined period of time, investors could lose out on returns when better investment opportunities show up.
Equity Investments
Order the parable of the talents discussion
Equity markets include common and preferred stocks. Buying a stock means taking a portion of a company’s ownership. Depending on the stock, some stocks pay out regular dividends to their stockholders. Besides monetary ownership, stockholders also gain a voice in the company and are entitled to votes “on matters of corporate governance” (Bodie, 2022).
Mutual Funds
Mutual funds are a collective of stocks that are included in an index such as the S
Order the parable of the talents discussion