Term In Review

What is the primary goal of portfolio management?

• Minimize returns with minimal risk

• Minimize risk with minimal returns

• Maximize risk with minimal returns

• Maximize returns with minimal risk

What is the first step in creating a portfolio?

• Develop an investment strategy

• Establish current financial situation and goals

• Analyze market and economic conditions

• Set investment objectives

What is the main focus of private banking?

• Serving geographically immobile individuals

• Offering traditional services like deposits and payments

• Providing personalized financial services to low-net-worth individuals

• Providing personalized financial services to high-net-worth individuals

What is the main criticism of offshore banking?

• Limited investment options

• Secrecy and tax minimization

• Lack of financial services

• High fees

What is the main strategy of hedge funds?

• Track stock market indices

• Aim for absolute returns, often using leveraging

• Buys entire companies, improves them, and sells for profit

• Invest in low-cost but risky investments

Arjun, Mason, and Noah are discussing which type of stocks provide stability and dividends. Which type of stocks are they referring to?

• Defensive

• Blue Chip

• Income

• Cyclical

What is the main characteristic of private equity?

• Track stock market indices

• Aim for absolute returns, often using leveraging

• Buys entire companies, improves them, and sells for profit

• Invest in low-cost but risky investments

What is the main characteristic of index funds?

• Buys entire companies, improves them, and sells for profit

• Invest in low-cost but risky investments

• Aim for absolute returns, often using leveraging

• Track stock market indices

What is the main purpose of a 401(k) retirement plan?

• Provide tax-free income during retirement

• Allow employees to take out loans against their retirement savings

• Offer employer matching contributions

• Invest in high-risk stocks for maximum returns

What is the main characteristic of a traditional pension plan?

• Employees contribute a percentage of their salary

• Employer bears the investment risk

• Retirement benefits are based on investment performance

• Employees have control over their investment choices