How Do You Spell BASKET PURCHASE?

Pronunciation: [bˈaskɪt pˈɜːt͡ʃɪs] (IPA)

The spelling of the phrase "basket purchase" is quite straightforward. In IPA phonetic transcription, it would appear as /ˈbæskɪt ˈpɜrtʃəs/, with the stress on the first syllable of each word. This term is used in accounting to refer to the practice of buying a group of assets or goods together at a single price to obtain better overall value. Its spelling reflects its origins in the concept of purchasing a basket of items together.

BASKET PURCHASE Meaning and Definition

1. A basket purchase refers to a financial transaction that involves the acquisition of multiple assets or securities as a bundled package or portfolio instead of purchasing these assets individually. It is a strategic move that investors use to diversify their holdings while managing risks and capitalizing on potential growth opportunities.

   In a basket purchase, the assets may include various stocks, bonds, mutual funds, or other securities that are combined into a single investment product. These assets are often selected based on a specific investment strategy or objective, such as targeting a particular sector or geographic region.

   The purpose of a basket purchase is to streamline the investment process and simplify portfolio management. By acquiring a basket of assets, investors gain exposure to a diversified range of investments with a single transaction, avoiding the need to purchase and monitor each asset individually.

   Basket purchases are commonly used by institutional investors, such as mutual funds or hedge funds, as they allow for efficient deployment of capital across multiple assets. This approach can help spread investment risk and potentially generate higher returns through a diversified portfolio.

   Overall, a basket purchase is a strategic investment decision that enables investors to acquire a bundle of assets instead of individual holdings, providing diversification and ease of management.

Etymology of BASKET PURCHASE

The word "basket purchase" is derived from the combination of two terms: "basket" and "purchase".

1. Basket: In the context of finance and investment, "basket" refers to a collection or group of different securities, assets, or currencies. It is a common practice to combine various items into one "basket" for trading or investment purposes. The term "basket" in this sense originated from the idea of placing different items in a literal basket for convenience and simplicity.

2. Purchase: The term "purchase" is derived from the Old French word "purchacier", meaning "to pursue, strive for, or obtain". Over time, its meaning evolved to specifically refer to acquiring or buying something in exchange for money or equivalent value.

Combining these two terms, "basket purchase" refers to a financial or investment process where multiple securities, assets, or currencies are acquired or purchased together as a package rather than individually.