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1.
In the bucketing approach to retirement allocation, where would funds for the distant future be placed?
In bonds and stocks. Putting that money in stocks and bonds will give it some room to grow as it awaits eventual use.
2.
If you find yourself following the crowd in your investment choices, you are doing what kind of practice?
Behavioral finance. Behavioral finance covers a number of psychological practices that tend to be at odds with the mathematical approach of various investing theories.
3.
In a nutshell, the efficient market theory says _______.
You can't beat the market. The theory says that stock prices are as correct as they possibly can be, and therefore you cannot beat the market. It has its detractors, however.
4.
Favoring smaller companies over larger ones is an example of ______.
