All Courses > Portfolios > 500
Portfolios 501: Why Bother with Investment Theory?

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.
If you find yourself following the crowd in your investment choices, you are doing what kind of practice?
Choose wisely. There is only one correct answer.
Behavioral finance. Behavioral finance covers a number of psychological practices that tend to be at odds with the mathematical approach of various investing theories.
2.
What is a total-return approach in which a retiree segments a portfolio based on when the retiree expects to need the money?
Choose wisely. There is only one correct answer.
Bucketing.
3.
What investment theory says that you can limit your volatility by spreading your risk among different types of investments?
Choose wisely. There is only one correct answer.
Modern Portfolio Theory.
4.
What practice is related to tax planning?
Choose wisely. There is only one correct answer.
Asset location.
5.
In the bucketing approach to retirement allocation, where would funds for the distant future be placed?
Choose wisely. There is only one correct answer.
In bonds and stocks. Putting that money in stocks and bonds will give it some room to grow as it awaits eventual use.