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1.
In the long term, bonds and cash generally have lower returns than stocks.
Choose wisely. There is only one correct answer.
True. In the long term, stocks tend to have higher returns than other investments.
2.
The amount your investment changes up and down in value over time is known as ______.
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Volatility. The tendency for investment values to fluctuate up and down is known as volatility.
3.
The goal of a tax-managed fund is tax efficiency.
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True. The goal of a tax-managed fund is tax efficiency.
4.
Long time horizons generally enable us to assume _______ short-term ones.
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More risk than. Time reduces risk.
5.
If you want the safety of low-volatility investments, you will have to accept ________ as well.
Choose wisely. There is only one correct answer.
Lower returns. As a rule, the lower the volatility of an investment, the lower the potential return.