WorksheetsPF - Unit 6: Investing Strategies & Exponential Functions
Total questions: 20
Worksheet time: 10mins
Name
Class
Date
1.
The S&P 500 is…
a)
An actively managed mutual fund
b)
A diverse collection of stocks and bonds
c)
An index of the 500 largest privately-traded companies in the world
d)
An index of the 500 largest publicly-traded companies in the US
2.
All of the following are true about robo-advisors, EXCEPT…
a)
Robo-advisors generally have lower fees than a traditional financial advisor
b)
Robo-advisors generally have a higher account minimum than a traditional financial advisor
c)
Robo-advisors use an algorithm to automate the investing process
d)
Robo-advisors generally invest your portfolio based on your goals and risk tolerance
3.
Alberto has decided to invest his retirement money into a mutual fund filled with mid-sized US companies. The fund manager is…
a)
A CEO at one of those midsize companies
b)
The person who selects which stocks to include in the fund
c)
The website where Alberto logs in to check his fund’s value
d)
The budgeting software Alberto uses to make sure he has enough saved every month
4.
All of the following are factors to consider when opening a brokerage account EXCEPT
a)
Your investing goals
b)
Who will manage the account
c)
Fees that will be charged
d)
The location of the brokerage company
5.
Alma recently started investing in a target-date fund with a planned retirement date that is 38 years in the future. How is the portfolio in her TDF most likely allocated?
a)
Majority stocks and a small percentage of bonds
b)
Half stocks and half bonds
c)
Majority bonds and a small percentage of stocks
d)
Her TDF allocation will depend on the specific securities she selects
6.
Which fund will most working American citizens have access to at retirement?
a)
A traditional IRA
b)
A Roth IRA
c)
A pension plan
d)
Social Security
7.
If you invest money into an index fund that tracks the Dow Jones Industrial Average, you would expect…
a)
A lot of high fees, because there are only 30 companies in that index
b)
To outperform most other investors because of the elite status of this index
c)
Your returns to track the performance of 30 large US companies
d)
Your fund manager to contact you on a regular basis with suggestions on whether to buy or sell
8.
Which statement about the investment fees associated with mutual funds is true?
a)
You’ll pay a one-time fee when you start your investment portfolio with a mutual fund
b)
You’ll only pay fees to your fund manager if your portfolio has a return over 5%
c)
Fees are typically set at 10 to 15%, annually, of the amount you have invested
d)
Fees, compounded over the life of your investment, can substantially decrease your returns
9.
Which type of fund is usually passively managed, can be traded throughout the day, and is bought directly from other investors like a stock?
a)
Mutual fund
b)
Robo-advisor
c)
Exchange-traded fund
d)
Target date fund
10.
In 2022, Noah decided to start investing in a target-date fund at Alpine brokerage. They are 24 years old, have been working for 5 years, and are planning on retiring at 67. Which target-date fund should they choose?
a)
Alpine Target Retirement 2060 Fund
b)
Alpine Target Retirement 2065 Fund
c)
Alpine Target Retirement 2070 Fund
d)
Alpine Target Retirement 2075 Fund
11.
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:
a)
Lump Sum Investing
b)
After Tax Averaging
c)
Dollar-Cost Averaging
d)
Average Paycheck Investing
12.
Ash remembers learning about both 401(k)s and IRAs in his personal finance class during high school. He’s early in his career, and he can really only afford to fund one type of account with about $100 per month right now. What should he do?
a)
Fund a 401(k) because his employer is offering a match, up to 3% of his salary
b)
Fund a traditional IRA, because it will offer him, by far, the best tax advantages
c)
Fund neither account, because $100 does not meet the minimum requirements for any retirement account type
d)
Fund a savings account, because it will guarantee an interest rate, rather than leaving his retirement up to a risky investment option
13.
Which of the following is an example of the bias of Chasing Trends?
a)
Buying a stock when it has hit its lowest price of the year
b)
Buying cryptocurrency because you saw a headline about it reaching its highest price ever
c)
Researching the long term growth strategy of a company
d)
Buying stock in an industry that is not represented in your portfolio to increase diversity
14.
Each of the following factors impacts how much money you will have available at retirement EXCEPT…
a)
What percent of your income you invest each month
b)
Whether you qualify for Social Security benefits
c)
How old you are when you start investing
d)
How often you log into your online brokerage account
15.
Kendall completed her med school training 10 years ago and is now a successful highly-paid surgeon at a major hospital. What type of account would be most beneficial for Kendall to use to start saving for retirement, so she can enjoy time off after a stressful career?
a)
Social Security, because she will pay into it throughout her career
b)
A traditional 401(k), because it will reduce her taxable income now
c)
A Roth IRA, because she can pay taxes on the money now and take it out tax-free later
d)
A regular brokerage account, because tax advantages don’t matter that much
16.
Evaluate.
a)
3
b)
4
c)
10
d)
27
17.
Look at the graph. Which of the four functions has the smallest value for the growth factor "b"?
a)
Function a
b)
Function b
c)
Function c
d)
Function d
18.
Which of these functions has an asymptote at y = 2?
a)
A
b)
B
c)
C
d)
D
19.
The data points below represent 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 true?
a)
A linear regression model would likely have a higher r2 value
b)
The model is not a good fit for the data points because the r2 value is close to 1
c)
The assets managed by index funds have grown by approximately 14.91% per year
d)
The model predicts that US index funds will manage approximately $1.7 trillion in assets in 2023
20.
Solve for x.
a)
x = 2
b)
x = 3
c)
x = 4
d)
x = 5
100 %
