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Choose wisely. There is only one correct answer to each question.

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1.
Say you are considering two different companies to invest in. One is very risky and the other has only average risk. Which of the two would require a bigger margin of safety?
Choose wisely. There is only one correct answer.
The very risky one. Given the bigger risk of loss, a bigger margin of safety will do more to protect you.
2.
Fat-pitch strategy argues that you should be comfortable holding cash instead of being invested in stocks when the market is already rising.
Choose wisely. There is only one correct answer.
True. Fat-pitch strategy argues that it is an advantage to forego buying strong companies when their prices are rising and instead wait with your cash in hand for when their stock prices dip.
3.
Which of the following is not a reason that investors should refrain from trading often?
Choose wisely. There is only one correct answer.
Once a stock is purchased, it should never be sold. Although it's possible that you could purchase a stock that will never need to be sold, there are occasions that investors should sell stocks. The other two answers are both reasons that investors should not trade very often.
4.
If you are going to succeed at holding a concentrated portfolio of stocks (say, fewer than 20), then you should buy only wide-moat companies.
Choose wisely. There is only one correct answer.
True. Companies with wide moats will increase in intrinsic value over time. Therefore, a small portfolio will generally succeed.
5.
Companies with wide economic moats tend to have _______.
Choose wisely. There is only one correct answer.
Long-term staying power. Their competitive advantages help to ensure that they will survive for a long time.