Choose wisely. There is only one correct answer to each question.
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1.
Which of the following should you tune out?
A prediction on television about where the market will be next year. You should tune out the noise, which includes short-term predictions made by others concerning things that cant be predicted.
2.
Past performance is sometimes a good _______ of future results.
Indicator. Though past performance is not a guarantee of future results, it can still be a good indicator of good results. Still, do your homework.
3.
When owning a stock, you should evaluate its price relative to the price you paid for it.
False. The price you paid for it isnt very relevant. What is relevant for evaluating a stocks price is the estimated value of future cash flows.
4.
Being a stubborn investor will always pay off.
False. Often, being stubborn will lead to losses. If youre holding a stock whose company is foundering, it may not be wise to hold onto it.
5.
A good investor ______.
Is willing to go against the crowd. The crowd is often -- but not always -- wrong.