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.
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.
3.
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.
4.
Investors have historically been punished for taking market risk.
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False. On the contrary, investors historically have been rewarded for taking market risk.
5.
The plan you set with a financial advisor will be regularly reviewed.
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True. The plan will be reviewed to determine how well you are progressing toward meeting your goals and to determine whether they should be changed.
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.