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1.
An investment's volatility over the long term generally _______ compared to its volatility over the short term.
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Decreases. Volatility generally decreases when comparing longer investment periods to shorter ones.
2.
Long time horizons generally enable us to assume _______ short-term ones.
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More risk than. Time reduces risk.
3.
The goal of a tax-managed fund is tax efficiency.
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True. The goal of a tax-managed fund is tax efficiency.
4.
The amount of money you invest in an asset depends on _______.
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Both of the above. The way you allocate your money depends on your risk tolerance and time horizon.
5.
The amount your investment changes up and down in value over time is known as ______.
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Volatility. The tendency for investment values to fluctuate up and down is known as volatility.