Basics Beginner: Creating a Portfolio

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
In investing, taking as many factors as possible into account and then choosing the best course of action is called _______.
Choose wisely. There is only one correct answer.
Calculated risk. This approach involves taking account of various factors to judge how they will affect your possible choices.
2.
Financial advisors suggest diversifying because putting your money into different investments is often the best way to avoid losing large sums of money.
Choose wisely. There is only one correct answer.
True. Diversifying spreads risk among several investments.
3.
Having lots of money opens you to a wide choice of investment options.
Choose wisely. There is only one correct answer.
True. Many investments require a large minimum amount to begin. For example, some bonds are sold in $5,000 minimums.
4.
How does having a lot of money affect your risk tolerance?
Choose wisely. There is only one correct answer.
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.
A mutual fund that changes its holdings as the market itself changes is called a(n) _______ fund.
Choose wisely. There is only one correct answer.
Asset allocation. Asset allocation funds use formulas to alter the percentages of their holdings as market conditions change.
6.
Why is your age important when you create an investment portfolio?
Choose wisely. There is only one correct answer.
All of the above. All of these make your age a factor for successful investing.