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 greater potential return that investments offer in return for accepting greater risk is called ________.
Choose wisely. There is only one correct answer.
Risk premium. This is the "reward" for taking on risk.
2.
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.
3.
It is never smart to invest through a full-service broker.
Choose wisely. There is only one correct answer.
False. Investors who do not want to put in the time or effort to research and manage their investments may find a full-service broker essential.
4.
_______ 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.
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.