Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
Risk tolerance is the amount of risk with which you are comfortable.
True. It determines your choices of investments, among many other things.
3.
The portion of the future over which you will invest is your _______.
Time horizon. Taking your time horizon into consideration will help you determine how to allocate your resources.
4.
The closer the beta of an investment is to 1, _______.
The closer its volatility is to that of the whole market. "1" is the base value of beta.
5.
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.
6.
Mutual fund holdings are allocated to meet certain ________.
Investment goals. With investment goals in mind, mutual fund managers can meet all their other objectives.