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FP 101 Week 6 Quiz
Complete the Week 6 Quiz provided by your facilitator.
Submit your Week 6 Quiz as a Microsoft® Word®attachment to the Assignment Files tab.
Week 6
- Which of the following steps is NOT a factor to be considered before making your first investment?
- Work to balance your budget.
- Manage your credit card debt.
- Save at least $10,000 to invest.
- Start an emergency fund.
- As people approach retirement, which of the following holds true for most?
- Their choices of investments do not change.
- They choose more conservative investments.
- They choose more risky investments.
- They move all their money into certificates of deposit.
- When choosing an investment, you should consider risk. The four primary risk components are
- Business failure, inflation, buying power, stock
- Buying power, inflation, interest rate, market
- Inflation, interest rate, business failure, market
- Market, bond, stock, inflation
- The process of spreading your assets among several different types of investments to lessen risk is called
- Asset allocation
- Asset combination
- Asset investments
- Asset returns
- If you need access to your funds in two years or less, which of the following investments would be least appropriate?
- Cash
- Certificates of deposit
- Short-term government bonds
- Stocks and mutual funds
- Some financial experts suggest that investors include a percentage of growth investments as part of their portfolio. This can be calculated by subtracting your age from
- 90
- 100
- 110
- 120
- Timothy has $100 automatically invested in stock each month. This way, he does not buy high and sell low. He is using a
- Buy and hold technique
- Direct investment plan
- Direct reinvestment plan
- Dollar cost averaging technique
- What happens to the price of bonds when interest rates go up?
- It goes down.
- It goes up.
- Bond prices are unaffected by fluctuations in interest rates.
- It stays the same. Bond prices are determined by the market dynamics of buying and selling.
- Since 1926, the average annual return for stocks has been about
- 8%
- 10%
- 12%
- 14%
- Which of the following is a fund that invests in stocks or securities contained in specific stock or securities index?
- Closed-end fund
- Exchange-traded fund
- No-load fund
- Open-end fund
- A no-load mutual fund
- May allow investors to pay a sales charge
- Charges commission when you buy shares
- Can charge a fee of up to 0.25% of its assets
- Is available only via the Internet
- Which of the following types of stock funds invests in the same companies included in the Standard & Poor’s 500 stock index?
- Equity income funds
- Growth funds
- Index funds
- International funds
- An example of a lifecycle fund is a fund that
- Assists investors with planning for retirement by a specific date
- Initially invests in conservative securities, then changes to invest in more risk-oriented securities as time goes by
- Invests in shares of other mutual funds in order to increase diversification and asset allocation
- Has principal protection as its main objective
- At what age are you are required to begin withdrawing money from non-Roth IRA’s?
- At age 70 ½
- Never – You can die without ever having withdrawn a penny from it and pass it income-tax free to your heirs.
- When you begin receiving Social Security payments
- At age 59 1/2
- Money in a 401(k) grows in what way
- Tax-free
- Tax-exempt
- Tax-deferred
- Taxable