Strategy Beginner: Introduction to Investment Strategy

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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.
A reasonably intelligent person who studies the tax code from time to time can probably make good decisions about how to shelter investment income from taxes.
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False. Even the simplest workplace retirement plan can have tax implications that require expert advice.
3.
Inflation affects _______.
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Both the value of investments and interest rates. Inflation affects both, which is why many investors watch it carefully.
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.
Companies that do not pay dividends might be good growth investments.
Choose wisely. There is only one correct answer.
True. Often, companies do not pay dividends in order to funnel more profits into growth.