All Courses > Portfolios > 100
Portfolios 103: How Much Risk Can You Tolerate?

Test your knowledge

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

0%
Keep studying!
Review your answers below to learn more.
1.
Which is NOT a way that volatility can lead you to miss the forest for the trees?
Choose wisely. There is only one correct answer.
Volatility may make you buy or sell a security based on your goals. Volatility can make you invest too conservatively or make an investment decision based solely on short-term performance. Either way, you're not seeing the forest (your goal) for the trees (volatility).
2.
Learning to tolerate day-to-day gyrations in your portfolio is not helpful for dealing with risks in the longer term.
Choose wisely. There is only one correct answer.
False. Most likely, it will help you to put risk into perspective and help you tolerate longer-term risks.
3.
How can you limit market risk?
Choose wisely. There is only one correct answer.
Invest in a variety of markets. To limit the risk of one entire market losing money, invest in a variety of markets.
4.
How can you limit company-specific risks?
Choose wisely. There is only one correct answer.
Invest in a variety of stocks. To limit the operational and price risk that one company poses, invest in a variety of companies.
5.
To help you develop your investment philosophy about volatility and risk, there are several questions you should answer. Of the following, which one would be least helpful?
Choose wisely. There is only one correct answer.
What are your stock prices today? This question is not helpful for developing your investment philosophy.