Investing and Retirement

If you leave a job and have money saved in your employer's retirement plan, always roll that money into an IRA using direct rollover, which allows you to avoid taxes and penalties.

• True

• False

A mutual fund portfolio that is properly diversified will have all investment dollars located in just one of four different classes of financial assets.

• True

• False

Savings accounts and money-market accounts are most appropriate for:

• Long-term investments like retirement

• Earning a high rate of return

• Emergency funds and short-term goals

You should start investing as soon as you have your college education funded.

• True

• False

The benefit of diversification in investments is:

• Increased risk

• Reduced risk

• Increased return

Saving and investing have nothing to do with the amount of money you make.

• True

• False

A reason people need to save and invest is:

• Enable their money to make money

• Increase their money supply

• Be able to get anything they want

Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money

• Liquidity

• Risk

Money that is invested, either tax deferred or tax free, within a retirement plan

• Dividend

• Tax-favored

Single stocks and mutual funds carry the same amount of risk.

• True

• False