Financial Planning I - Obj. 3.02 Review

Which statement is false about using a buy-and-hold strategy?

• there are tax benefits

• stocks must be carefully monitored

Which is an important business factor to consider when choosing an investment?

• risk tolerance

• comparison to competition

What should a buyer do before investing?

• graduate from college

• be at least 21 years old

• conduct thorough research

What trait is important to make wise investment decisions?

• Knowledge

• age

• wealth

_______ refers to investing to reach a goal within three years.

• short term horizon

• risk-tolerant horizon

• intermediate-term time horizon

Which is the least likely reason to make a significant change in a personal asset location?

• birth of a child

• new car purchase

• marriage

Fundamental analysis estimates the value of a stock primarily so investors can tell whether it is undervalued or overvalued.

• False

• True

Scott invests $100/mo in his favorite stock. Last month, it was $20, he bought 5 shares but this month its $25, so he bought 4 shares. What is this strategy called?

• growth investing

• diversification

• dollar cost averaging

The Printing Shop is popular with investors who continue buying shares when stock prices increase. Which company value is increasing?

• underlying

• intrinsic

• accounting

• market

Which factor should have the least influence on a person's investment choices?

• financial decsions of one's parents

• age

• current income

• marital status