Choose wisely. There is only one correct answer to each question.
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1.
Your asset allocation is _______.
Your portfolios blend of stocks, bonds, and cash. Asset allocation simply means how youve divided up your investment mix.
2.
If you want to improve your chances of meeting your investment goal, what can you do?
Invest more money now. Investing more will always improve your chances. So will lengthening your time horizon or becoming more aggressive with your investments.
3.
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.
4.
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.
5.
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.
