Choose wisely. There is only one correct answer to each question.
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1.
What sort of expectation should a stock investor have regarding success?
Success should be something you are willing to wait for. Even though stocks have historically returned in the 10% range, you must still have patience when investing in them. If you expect to get rich quickly, you will most likely be disappointed, and you may find yourself drawn to speculating, which is very volatile.
2.
Which of the following should you tune out?
A prediction on television about where the market will be next year. You should tune out the noise, which includes short-term predictions made by others concerning things that cant be predicted.
3.
A good investor ______.
Is willing to go against the crowd. The crowd is often -- but not always -- wrong.
4.
Being a stubborn investor will always pay off.
False. Often, being stubborn will lead to losses. If youre holding a stock whose company is foundering, it may not be wise to hold onto it.
5.
When owning a stock, you should evaluate its price relative to the price you paid for it.
False. The price you paid for it isnt very relevant. What is relevant for evaluating a stocks price is the estimated value of future cash flows.
