Unit 6 Quiz

The S&P 500 is...

• An actively managed mutual fund

• A diverse collection of stocks and bonds

• An index of the 500 largest publicly-traded companies in the world

• An index of the 500 largest publicly-traded companies in the US

All of the following are true about robo-advisors, EXCEPT...

• Robo-advisors generally have lower fees than a traditional financial advisor

• Robo-advisors generally have a higher account minimum than a traditional financial advisor

• Robo-advisors use an algorithm to automate the investing process

• Robo-advisors generally invest your portfolio based on your goals and risk tolerance

All of the following are factors to consider when opening a brokerage account EXCEPT

• Your investing goals

• Who will manage the account

• Fees that will be charged

• The location of the brokerage company

Which fund will most working American citizens have access to at retirement?

• A traditional IRA

• A Roth IRA

• A pension plan

• Social Security

Which type of fund is usually passively managed, can be traded throughout the day, and is bought directly from other investors like a stock?

• Mutual fund

• Robo-advisor

• Exchange-traded fund

• Target date fund

Zora has $5,000 to invest. When assessing her goals, she decides that she wants to create a low-risk, low-volatility portfolio. Based on this assessment, a good strategy for Zora would be:

• Lump Sum Investing

• After Tax Averaging

• Dollar-Cost Averaging

• Average Paycheck Investing

Look at the graph. What pair of functions has the greatest and least values for b? (Hint: Exponential Function is y=a*b^x)

• greatest: a

  least: d

• greatest: b

  least: c

• greatest: c

  least: d

• greatest: a

  least: b

What would the a value be for each of these functions? (Hint: Exponential Function is y=a*b^x)

• 1

• 2

• 3

• 4

The data table represents the total assets invested in index funds in the US each year since 1993. Analyze the results of the exponential regression model shown. Which of the following statements is not true?

• The linear regression model is an exponential function

• The model is not a good fit for the data points because the r^2 value is close to 1

• The assets managed by index funds have grown by approximately 14.91% per year

• The model predicts that US index funds will have less than $500 billion in assets within the first 10 years

Which value from the table tells you how well the data points correlate to the function?

• R^2

• a

• b

• x