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.
Which of the following is not a long-term growth investment?
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Certificate of deposit. A certificate of deposit is not a long-term growth investment. It is an income investment.
3.
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.
4.
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.
5.
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.
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.