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1.
Mutual fund holdings are allocated to meet certain ________.
Investment goals. With investment goals in mind, mutual fund managers can meet all their other objectives.
2.
In investing, taking as many factors as possible into account and then choosing the best course of action is called _______.
Calculated risk. This approach involves taking account of various factors to judge how they will affect your possible choices.
3.
Having lots of money opens you to a wide choice of investment options.
True. Many investments require a large minimum amount to begin. For example, some bonds are sold in $5,000 minimums.
4.
Investment portfolios can be called efficient when they ________.
Contain the best possible mixes of assets for a specific risk level and return. Efficiency is relative to the kind of objective that you are trying to fulfill.
5.
How does having a lot of money affect your risk tolerance?
It can enable you to afford loss. If you have a lot of money, you can afford to lose some, and so your risk tolerance will increase.
6.
Investment advisors suggest increasing the number of fixed-income securities in your portfolio as you age because _______.
Advanced age makes it difficult to regain losses from more volatile investments such as stocks. Having fixed-income securities in your portfolio can reduce this problem.