Choose wisely. There is only one correct answer to each question.
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1.
By first _______, you can comfortably allocate a desired amount of money to investing.
Taking an inventory of what you own. This will help you figure how much cash you have available to invest.
2.
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.
3.
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.
4.
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.
5.
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.
6.
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.