Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
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.
2.
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.
3.
There are mutual funds that change the amounts of their holdings to keep up with market changes.
True. These funds are called asset allocation funds. They use formulas to change their allocations.
4.
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.
5.
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.
6.
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.