WorksheetsAdvanced Financial Literacy Unit #4 Test Review Activity
Total questions: 30
Worksheet time: 2hrs 30mins
A collection of investment assets owned by an individual or entity.
Portfolio
Asset allocation
Derivative
Currency
___________________ is how investors split up their portfolios among different kinds of asset classes.
Diversification
Asset allocation
Buy-and-hold
Dollar-cost averaging
A strategy that mixes a wide variety of investments within a portfolio to reduce firm-specific risk.
Buy-and-hold
Dollar-cost averaging
Asset allocation
Diversification
Investing the same amount of money in an investment asset at regular intervals over a certain period..
Buy-and-hold
Dollar-cost averaging
Asset allocation
Diversification
The type of risk that cannot be eliminated by diversification is ________________.
individual company
market
firm-specific
unsystematic.
Which response below would LEAST identify with buy-and-hold strategy?
Strongly considers peaks and valleys when considering investment choices.
Passive investing that does not try to time the market.
Buying assets and not selling them for extended periods.
Favored strategy of investment guru Warren Buffett.
ALL the responses below are true regarding index funds EXCEPT
Replicates the exact asset allocation and diversification of the model investment portfolio
Regularly outperform many professional fund managers.
Professional managed.
Low expense fees.
Unlike index or mutual funds, exchange-traded funds _____________________.
provide investors a portfolio replication of diversified assets.
help investors meet specific investment goals.
are priced and exchanged during trading hours.
can track different asset classes like, stocks, bonds, and commodities.
Check ALL that apply regarding mutual funds?
Actively managed.
Are privately traded.
Higher expense fees and commissions than index funds.
Known by the asset classes they invest in, their investment objectives, and the type of returns they seek.
An aggressive investor with a 30-year time horizon would MOST likely invest in which fund below?
Small-Cap Growth Mutual Fund
Municipal Bond ETF
U.S. Treasury Bond Index Fund
Balanced Mutual Fund
An moderately aggressive investor with a 15-year time horizon would MOST likely invest in which fund below?
SPDR S&P 500 Index ETF
International Emerging Markets Stock Mutual Fund
Municipal Bond Index Fund
Money Mutual Fund
A conservative investor who is retired would MOST likely invest in which fund below?
QQQ NASDAQ ETF
High Yield Corporate Bond Mutual Fund
S&P 500 Index Fund
U.S. Treasury Bond Fund
A moderately conservative investor who is approaching retirement would MOST likely invest in which fund below?
Balanced Mutual Fund
International Stocks Mutual Fund
S&P 500 Index Fund
U.S. Treasury Bond Fund
Strategically designed diversified portfolio of stocks in specific economic areas.
Sector funds
Commodity funds
Balanced funds
Bond funds
Gold, silver, oil, and natural gas would all be examples of components in
Sector funds
Commodity funds
Balanced funds
Bond funds
The difference between an international and global mutual fund is
international funds contain ONLY stocks.
international funds contain ONLY foreign companies.
global funds have stocks and bonds.
global funds contain ONLY foreign companies.
Which answer below would BEST define a balanced mutual fund?
Actively managed diversified portfolio of stocks and bonds.
Actively managed diversified portfolio of U.S. and foreign stocks.
Passively managed diversified portfolio of Large and Mid-Cap stocks
Actively managed diversified portfolio of U.S Treasuries and Municipal Bonds.
Which risk tolerance would BEST identify with this asset allocation?
Moderate
Aggressive
Conservative
Moderately Conservative
Which risk tolerance would BEST identify with this asset allocation?
Moderately Aggressive
Aggressive
Conservative
Moderately Conservative
Which risk tolerance would BEST identify with this asset allocation?
Moderate
Aggressive
Conservative
Moderately Aggressive
Adolfo has committed to investing $100 each month in his favorite S&P 500 Index Fund. Last month, when the fund price was $20, he bought five shares. This month the fund price is $25, so he bought just four shares. This strategy is called:
dollar cost averaging.
growth investing.
diversification.
buy-and-hold.
Who manages a mutual fund?
An individual investor.
A professional money manager
A certified public accountant
A stockbroker
A ___ fund is a mutual fund that purchases foreign stocks and bonds as well as U.S. securities.
balanced
income
global
international
The Sharpe Ratio measures
an investment’s systematic risk relative to the overall market.
return of an investment given its level of risk.
the quality of diversification in a portfolio.
how much a fund's returns are in excess of the market average.
A mutual fund's Beta measures
its systematic risk relative to the overall market.
return of an investment given its level of risk.
the quality of diversification in a portfolio.
how much a fund's returns are in excess of the market average.
An investment portfolio's correlation coefficient measures
its systematic risk relative to the overall market.
return of an investment given its level of risk.
the quality of diversification in a portfolio.
how much a fund's returns are in excess of the market average.
Check ALL that apply regarding market risk:
Is measured with Beta.
Can be diversified away.
Known as systematic risk.
Caused by political or macroeconomic challenges.
Check ALL that is true regarding mutual fund contributions.
Investors own shares in the fund.
Investors own the investment assets in the fund.
Used to buy the assets that comprise the investment portfolio
Are priced during exchange trading hours.
Check ALL that apply towards the ways investors earn profits from mutual funds.
Coupon payments on bonds held by the fund
Capital gains distributions created by selling stocks held within the fund.
Investors selling mutual fund shares at a higher price.
Dividend payments earned from stocks held within the fund.
Check ALL that apply regarding investment strategies met by ETFs.
Hedging one's investment portfolio.
Speculating on the price movement of a market index
Income generation
Active and professional managed portfolio
