Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Risk tolerance is the amount of risk with which you are comfortable.
True. It determines your choices of investments, among many other things.
2.
Financial advisors suggest diversifying because putting your money into different investments is often the best way to avoid losing large sums of money.
True. Diversifying spreads risk among several investments.
3.
Why is your age important when you create an investment portfolio?
All of the above. All of these make your age a factor for successful investing.
4.
A mutual fund that changes its holdings as the market itself changes is called a(n) _______ fund.
Asset allocation. Asset allocation funds use formulas to alter the percentages of their holdings as market conditions change.
5.
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.
6.
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.