Business Finance Q2 M2 Ways to Minimize or Reduce Investment Ris

All investments involve risks.

• TRUE

• FALSE

Net worth is assets minus liabilities.

• TRUE

• FALSE

Risk capital is the money that if lost on an investment will impact the financial position and lifestyle.

• TRUE

• FALSE

It is important to do some research about the investment instruments before finalizing the investment plan.

• TRUE

• FALSE

Checking the investment’s history, earnings growth, management team, and debt load will provide more information about the investment portfolio.

• TRUE

• FALSE

Diversification of investment portfolios is one way to minimize investment risk.

• TRUE

• FALSE

Proper reallocation of investments depends on such factors as age, investment period and investment temperament.

• TRUE

• FALSE

It is not safe to invest in an instrument that the government guarantees like Treasury bonds.

• TRUE

• FALSE

Lower risk is usually associated with a greater probability of higher return.

• TRUE

• FALSE

Asset allocation is the process of spreading your assets among different types of investments to lessen risk.

• TRUE

• FALSE