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.
Risk tolerance is the amount of risk with which you are comfortable.
True. It determines your choices of investments, among many other things.
3.
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.
4.
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.
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.
Mutual fund holdings are allocated to meet certain ________.
Investment goals. With investment goals in mind, mutual fund managers can meet all their other objectives.