Basics Beginner: Investment Goals

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1.
All of the following investments would be suitable for current income except _______.
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Aggressive-growth mutual funds. These would be unsuitable for an income investor because growth investors sacrifice current income and usually wait long periods while their investments grow in value.
2.
If you wanted to accumulate assets for a down payment on a home in 10 years, which investment would be best suited for that?
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Growth mutual fund. This investment is liquid and provides better opportunity for appreciation than money market funds or CDs.
3.
To get a clear picture of your current financial status, you can calculate your _______.
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Net worth. Your net worth will tell you where you are as you begin investing.
4.
The rate at which prices increase over time is called inflation.
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True. Inflation is the process of rising prices.
5.
The portion of the future over which you will invest is your _______.
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Time horizon. Taking your time horizon into consideration will help you determine how to allocate your resources.
6.
A financial advisor focuses only on one specific area of your finances.
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False. A financial advisor focuses on your overall financial health.