Strategy Beginner: Introduction to Investment Strategy

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1.
When interest rates go up, the value of your current bonds on the market _______.
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Goes down. Market prices of bonds tend to have an inverse relationship to interest rates.
2.
If you might need to borrow against your principal, you need _______.
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A collateral investment. A collateral investment can be used to secure a loan.
3.
The greater potential return that investments offer in return for accepting greater risk is called ________.
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Risk premium. This is the "reward" for taking on risk.
4.
_______ are taxed at a relatively low rate if you hold your investments long enough.
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Capital gains. Long-term capital gains are taxed at a lower rate to encourage investment.
5.
It is never smart to invest through a full-service broker.
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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.