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.
The amount of money you have to invest does not play a role in your choice of investments.
Choose wisely. There is only one correct answer.
False. It plays a role because it alters your investment options and risk tolerance.
2.
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.
3.
Mutual fund holdings are allocated to meet certain ________.
Choose wisely. There is only one correct answer.
Investment goals. With investment goals in mind, mutual fund managers can meet all their other objectives.
4.
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.
5.
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.
6.
Investment portfolios can be called efficient when they ________.
Choose wisely. There is only one correct answer.
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.