Choose wisely. There is only one correct answer to each question.
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1.
What types of activities form the base of the investment pyramid?
The most important activities for investment success. The other parts will depend on these.
2.
In general, how should investors who are funding long-term goals allocate their assets?
Start heavy with high-quality stocks, then gradually shift more into safer securities over time. A portfolio that consists entirely of cash and short-term bonds will exhibit very few fluctuations, which can provide peace of mind and may be appropriate for very short-term goals, but not for long-term goals. Over time, it will get eaten alive by a portfolio that includes a stock component.
3.
Which statement is false?
By quantifying each of your goals, you may find that it is not possible to achieve them all. But it's better to know that early on, so you can prioritize.
4.
Why does budgeting still matter after you have stopped saving for retirement?
You may need to adjust your spending rate at times during retirement. Especially during market downturns.
5.
Why is setting your saving and spending rate more important in the investing pyramid than investment selection?
It helps you cope in the event of a shortfall in your investments.
