Strategy Beginner: Long-Term Investing

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1.
The ability to convert an investment into cash with little chance of loss is called ________.
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Liquidity. The more easily an investment can be converted to cash, the more liquid it is.
2.
Which of the following is not generally a goal of long-term investing?
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Current income. Receiving current income is not generally a goal of long-term investing. Long-term investors understand that they will have to put off income for months or years.
3.
Long-term investors can invest in tax shelters to reduce taxes.
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True. The savings investors get from tax-deferral expand the growth of their long-term investments.
4.
A disadvantage of many long-term investments is that they are not liquid.
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True. There is a risk of loss for many long-term investments if they are liquidated.
5.
Bonds with short maturities are effective investments for long-term investors.
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False. Bonds with long maturities are effective investments for long-term investors.