Test your knowledge

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1.
Most portfolio managers do not use market timing.
Choose wisely. There is only one correct answer.
False. Most portfolio managers do use market timing.
2.
The best time to buy a stock is when its price chart is closest to its _______.
Choose wisely. There is only one correct answer.
Support level. The best time to buy a stock is when its price chart is closest to its support level.
3.
A mutual funds volatility may be reduced by market timing.
Choose wisely. There is only one correct answer.
True. When used skillfully, market timing can reduce a mutual funds volatility.
4.
Which of the following is a risk of the buy and hold strategy?
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High volatility. This could lead to heavy losses.
5.
Market timing uses fundamental analysis to predict market changes.
Choose wisely. There is only one correct answer.
False. Market timing uses technical analysis to predict market changes.