Basics Beginner: Investment Goals

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1.
If you wanted to accumulate assets for a down payment on a home in 10 years, which investment would be best suited for that?
Choose wisely. There is only one correct answer.
Growth mutual fund. This investment is liquid and provides better opportunity for appreciation than money market funds or CDs.
2.
Investors have historically been punished for taking market risk.
Choose wisely. There is only one correct answer.
False. On the contrary, investors historically have been rewarded for taking market risk.
3.
It doesnt matter what you invest in as long as you invest.
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False. Different investments produce different returns; your investments need to match your investment goals.
4.
All of the following investments would be suitable for current income except _______.
Choose wisely. There is only one correct answer.
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.
5.
Investment advisors suggest increasing the number of fixed-income securities in your portfolio as you age because _______.
Choose wisely. There is only one correct answer.
Advanced age makes it difficult to regain losses from more volatile investments such as stocks. Having fixed-income securities in your portfolio can reduce this problem.
6.
The plan you set with a financial advisor will be regularly reviewed.
Choose wisely. There is only one correct answer.
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.