Strategy Beginner:
Long-Term Investing
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1.
Long-term investors can invest in tax shelters to reduce taxes.
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True
False
True. The savings investors get from tax-deferral expand the growth of their long-term investments.
2.
Real estate is generally an effective investment for the long term.
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True
False
True. Real estate usually, but not always, grows in value over long periods of time.
3.
The more an investments price changes, _______.
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The higher its volatility
The lower its volatility
The lower its capital gains taxes
The higher its volatility. Price changes and volatility are often found together in certain investments.
4.
Dividends are _______.
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Shared company profits
Designed to reduce taxes
Tax shelters
Shared company profits. Dividends are investors cuts of company profits.
5.
You should take inflation into account when buying long-term investments because _______.
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Inflation erodes purchasing power over time
Inflation only affects long-term investments to begin with
Neither of the above
Inflation erodes purchasing power over time. This is why you should consider the investment returns you can expect to get.
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DONE