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.
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.
Choose wisely. There is only one correct answer.
False. Even the simplest workplace retirement plan can have tax implications that require expert advice.
3.
The more liquid an investment is, _______.
Choose wisely. There is only one correct answer.
The easier it is to turn into cash. Liquid investments are easy to turn into cash, either by withdrawing from them or selling them.
4.
When interest rates go up, the value of your current bonds on the market _______.
Choose wisely. There is only one correct answer.
Goes down. Market prices of bonds tend to have an inverse relationship to interest rates.
5.
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.