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Retirement Intermediate:
Retirement Investing Strategies
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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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Increases
Decreases
Stays the same
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
Less risk than
The same risk as
More risk than. Time reduces risk.
3.
The goal of a tax-managed fund is tax efficiency.
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True
False
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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Your tolerance for risk
Your time horizon
Both of the above
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 ______.
Choose wisely. There is only one correct answer.
Rate of return
Volatility
Risk
Volatility. The tendency for investment values to fluctuate up and down is known as volatility.
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