worksheets

FP/120 WEEK 4 QUIZ

1. If you invest $4,000 per year over the next 40 years for retirement, which of the following is correct?

A low rate of return will give you the highest total dollar return.

A high rate of return will give you the highest total dollar return.

The rate of return does not matter; your total dollar return will be the same with any investment.

We cannot compare the total dollar return for a low rate of return or a high rate of return.

2. Which of the following would be considered a safe investment?

Options

Collectibles

Savings accounts

Commodities

3. The process of spreading your assets among different types of investments to lessen risk is called

Asset allocation

Asset combination

Asset investments

Asset returns

4. What happens to the price of bonds when interest rates go up?

It goes down.

It goes up.

Nothing. 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.

5. Megan decided to start investing in stocks. Which of the following should she do first?

Base her investing decisions on hot tips she hears at work.

Buy stocks based solely on her stockbroker's recommendation

Pick stocks at random

Research the corporations she is interested in, as well as their industries.

6. All of the following are advantages of a mutual fund except

Diversification

Professional management

Loads of up to 8.5%

Ease of buying and selling shares

7. Employees born in 1960 or later can receive full Social Security benefits beginning at what age?

59 1/2

62

67

70

8. Intestate is

The process of validating a will

A written will

Like, the LA Freeway

Dying without a valid will

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