Strategy Beginner: Introduction to Investment Strategy

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1.
The charge for investing in an annuity or mutual fund is called the ________.
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Load. The load is the charge for buying or selling shares in a mutual fund or annuity.
2.
The more liquid an investment is, _______.
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The easier it is to turn into cash. Liquid investments are easy to turn into cash, either by withdrawing from them or selling them.
3.
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.
4.
If your investment strategy is risk-averse, you avoid risk whenever possible.
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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.
_______ 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.