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1.
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.
2.
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.
3.
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.
4.
When a financial advisor says, "Let's talk about risk and how much you can deal with," he or she is talking about _______.
Risk tolerance. Risk tolerance is the amount of risk with which you are comfortable.
5.
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.
6.
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.