Strategy Beginner: Introduction to Investment Strategy

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
The charge for investing in an annuity or mutual fund is called the ________.
Choose wisely. There is only one correct answer.
Load. The load is the charge for buying or selling shares in a mutual fund or annuity.
2.
_______ are taxed at a relatively low rate if you hold your investments long enough.
Choose wisely. There is only one correct answer.
Capital gains. Long-term capital gains are taxed at a lower rate to encourage investment.
3.
If you might need to borrow against your principal, you need _______.
Choose wisely. There is only one correct answer.
A collateral investment. A collateral investment can be used to secure a loan.
4.
If your investment strategy is risk-averse, you avoid risk whenever possible.
Choose wisely. There is only one correct answer.
False. A risk-averse strategy does not seek to avoid risk entirely, but to get the best possible return at the lowest possible risk.
5.
Investors diversify to reduce the risks of different business trends.
Choose wisely. There is only one correct answer.
True. Diversifying helps them avoid any particular trend affecting their investments too much.