Strategy Beginner: Introduction to Investment Strategy

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1.
Investments in which earnings are allowed to build tax-free are called ______.
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Tax-deferred. Tax-deferred investments are those in which earnings are allowed to build tax-free until you receive them as income.
2.
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.
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 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.
5.
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.