Basics Beginner: Investment Goals

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1.
The rate at which prices increase over time is called inflation.
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True. Inflation is the process of rising prices.
2.
Time horizon is the amount of time you have to achieve your investment goal.
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True. It can be short-term or, in the case of retirement planning, decades long.
3.
A utility stock would be unsuitable for an investor seeking current income.
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False. Income stocks include preferred stock, utility stock, and large-cap, blue chip stocks. These stocks regularly pay income dividends.
4.
Financial advisors can help you consolidate your debts.
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True. Debt-reduction is an important first step in managing your finances.
5.
Which of the following is not a reason to invest for growth?
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To pay off current debts. Growth investing usually uses a long-term horizon, whereas paying off debts is usually done as soon as possible.
6.
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.