Choose wisely. There is only one correct answer to each question.
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1.
Different online asset allocation tools are good for giving you _______.
A ballpark view of your asset allocation. At best, you can expect a decent ballpark estimate of where you stand, though not a truly accurate determination.
2.
You need several pieces of information about a financial goal in order to determine the asset allocation strategy to use to achieve it. Which of the following is not one of those pieces of information?
Current investment earnings rates. These will not help you determine an asset allocation strategy. For one thing, they may be different next year.
3.
If youre uncomfortable taking on more risk, what can you do to improve your chances of meeting your goals?
Invest more each month and lengthen your time horizon. Neither investing more each month nor lengthening your time horizon increases your risk. But decreasing your exposure to bonds/cash increases your possible three-month loss.
4.
Which is NOT a limitation of online asset allocation tools?
They dont consider your time horizon. Most online asset allocation tools take your time horizon into account. They usually dont consider your tax situation, though. And all make different assumptions about things like inflation.
5.
If you become more aggressive with your investments, which of the following is likely to occur?
Your risk will increase. As you become more aggressive, your risk will increase.
