Mid unit 6 review part 1

Which of the following is NOT an advantage of investing in a mutual fund?

• mutual funds are diversified

• mutual funds have taxes

• mutual funds are professionally managed

• mutual funds provide options based on your risk tolerance

Which of the following is an advantage of owning an ETF that tracks a market index over single stocks?

• diversified

• price set by supply and demand

• more reasonably priced

• riskier

What primary factor should be considered when determining your asset allocation (or the diversification of your investments) among different assets?

• how much you want to make

• where you want to live

• how much the asset costs

• your age and desired retirement age

A financial risk-taker is someone who:

• Risks loss or injury in the hope of excitement, or accepts greater potential for loss in decisions and wants certainty.

• Dislikes risk and wants familiar tasks that he or she is comfortable accomplishing.

• Risking finances with the hopes of gaining more money

• Likes to perform activities that are illegal or may be considered unethical.

All of the following are factors that can influence a person’s risk tolerance except:

• investment goals

• age

• current income

• friend's advice

Which would be an expense ratio for a passively managed, index mutual fund?

• .03%

• .36%

• .58%

• .97%

A growth mutual fund has a higher expense ratio than an index fund because:

• a growth fund has more operating expenses

• a growth fund has a more diverse composition/portfolio

• a growth fund is risky d. a growth fund has a higher Net Asset Value (NAV)

• a growth fund has a higher Net Asset Value (NAV)

According to our risk spectrum, which investment listed below will most likely have the highest potential return over the long term?

• savings accounts

• corporate bond

• Penny stocks

• blue chip stocks

Why are cryptocurrencies such a speculative investment?

• because speculative investments are fun

• because collectibles are fun

• because cryptocurrencies do not produce income

• because not many people know enough about cryptocurrencies

Winnie sets aside $2750 into an investment with an annual interest rate of 2.3%, compounded annually. How long will it take for the money in her account to double?

• 31.3 years

• $1195

• 3.19 years

• it will never double

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