Choose wisely. There is only one correct answer to each question.
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1.
Diversification of your investments _______.
Can reduce risk in the market. There is no cure for market risk; diversification can reduce risk, however, though it is not guaranteed to.
2.
Suppose you need to accumulate an additional $10,000 in five years to pay for college. Which of the following is true about this "goal"?
It is clear, concise, and intermediate-term. You know how much (clear/detailed), when (concise), and that it is due in 3-7 years. Whether it is realistic depends upon whether you can save that much, doesnt it?
3.
You can find out where you are spending money needlessly by _______.
Tracking your spending for a while. The value of tracking your spending is that you become aware of every expense you make.
4.
If you set a financial goal and it fails, what could be a reason why it failed?
Any of the above. A goal could fail for any of these reasons.
5.
The stated goal "I want to create an emergency fund" is sufficiently specific to start working toward.
False. It is not specific enough; there is no way to tell how much time or money should be put into it.