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Exam 13: Investment Fundamentals

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Question 41

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When comparing similar investments,your objective is to earn the best after-tax return.

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Question 42

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____ investors consider investments in new companies,collectibles,and limited real estate partnerships.

A) Ultraconservative
B) Conservative
C) Moderate
D) Aggressive

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Question 43

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Long-term investors seek growth in the value of their investments that equals the rate of inflation.

Dividends are distributions of profits an investor receives for depositing funds in a bank or savings and loan association.

A good investment program replaces one's savings program.

Four strategies of portfolio management for long-term investors are portfolio diversification,asset allocation,buy-and-hold,and

If one is in the 25 percent marginal tax bracket,he or she will have an after-tax income of ____ from an investment that pays $1,500 in taxable income.

Savings is the accumulation of excess funds by intentionally spending less than you earn.

____ risk represents the uncertainty that the yield on an investment will deviate from what is expected.

When choosing among investment alternatives you want to focus on their

Investing goes beyond saving in that it

The first step in the investment planning process is to study available investment alternatives and learn as much as you can about the ones you like.

Typically the highest commissions are charged on investments in

____ are located at the base of the investment risk pyramid.

What is the average share price for the dollar-cost averaging strategy shown below? ​

The investment strategy where an investor buys a fixed dollar amount of stocks or mutual funds regularly over a long period of time is called

An active investor could be described as a long-term investor who makes regular investments in securities,such as mutual funds,and his or her assets are rarely sold for short-term profits.

Investment risk is speculative risk rather than pure risk.

Portfolio diversification is the practice of selecting a collection of investments that have dissimilar risk-return characteristics.

Using borrowed funds to make an investment is called