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Which of the following best describes dollar-cost averaging?




Week 8 Quiz;Please read through the following questions and based on your week 2 material, highlight;or underline the correct answer. Please submit quiz no later than midnight Sunday.;1);Which of the following best describes dollar-cost averaging?;a. The process of investing an average of a dollar a day in a stock mutual;fund;b. Investing an increasing dollar amount each month of the year;c. Timing the market so that you buy more when share prices drop;d. Investing a set dollar amount at regular intervals throughout the year;2);What should you do if you do not want to spend a lot of time managing your;investments?;a. Get out of the game. Successful investing requires time and attention. If;you do not have the time to devote to it, you should not do it.;b. Invest in last years best-performing mutual fund.;c. Invest in an index fund or ETF that tracks the entire stock market.;d. Invest in bond funds and other stable-value funds.;3);How should you adjust your retirement saving strategy if you are uncomfortable;owning stocks?;a. Invest a small amount each month in a savings or money-market account.;b. Plan on saving even more in conservative accounts than if you had invested;in stocks, or expect to live on less in retirement.;c. Plan on retiring at age 80 or later.;d. Invest in high-yield bonds with maturities of 10 years or more.;4);Investing your money is ideal for which of the following purposes;a. To meet current financial needs;b. To meet short-term financial goals;c. To meet mid-term financial goals;d. To meet long-term financial goals;5);Equity investments, or equity you purchase in a company, is also known as;a. mutual funds;b. stocks;c. bonds;d. IRAs;6);Which of the following is a good plan of action to take with your retirement plan;when the stock market is performing poorly?;a. Get out of stocks temporarily and shift back into them when the market;stabilizes.;b. Subtract your age from 100 and put that portion of your investments in;bonds.;c. Increase the amount you put into stocks and decrease your contributions to;bonds and stable-value funds.;d. Stay the course and continue to invest in your retirement plan.;7);What happens to the price of bonds when interest rates go up?;a. It goes down.;b. It goes up.;c. Nothing. Bond prices are unaffected by fluctuations in interest rates.;d. It stays the same. Bond prices are determined by the market dynamics of;buying and selling.;8);Which of the following is a loan to a company or to the government on which you;earn interest until you receive your money back in a specified number of years?;a. A stock;b. A bond;c. A personal loan;d. A target fund;9);What one thing can have the biggest impact on a mutual fund's performance over;time?;a. Its expense ratio;b. The track record of its manager;c. The sales load you paid when you bought it;d. The amount of money it holds;10);Which of the following should you look for when evaluating mutual funds?;a. A small, back-end load;b. A small front-end load;c. No load and a low expense ratio;d. A small front-end load and a low expense ratio;11);Which of the following is an investment that holds shares of many companies but;trades like a stock?;a. An equity mutual fund;b. A stock mutual fund;c. An exchange-traded fund;d. An index fund;12);What is the principal difference between an exchange-traded fund (ETF) and a;mutual fund?;a. ETFs have higher expense ratios.;b. ETFs are less expensive to buy.;c. ETFs can be bought or sold at any time during the day when the market is;open.;d. ETFs provide greater diversification than mutual funds.;13);Diversification reduces risk by spreading money among different investment;types. A rule of thumb is to subtract your age from 100 to determine how much of;this investment type you should own?;a. Bonds;b. Savings;c. Stocks;d. Target funds;14);Which type of fund automatically adjusts your investments based on when you;will retire?;a. Target fund;b. Index fund;c. Mutual fund;d. Exchange traded fund;15);The following is one primary reason you should periodically rebalance your;portfolio;a. Your financial advisor may move your holdings without you knowing.;b. Due to gains and losses, your percentage of investments in stocks, bonds;or certain types of stocks and bonds can shift from your overall strategy.;c. You may choose to no longer invest any of your savings.;d. Due to changing economic conditions, your portfolio may be moved to a;new manager.;View Full Attachment


Paper#29380 | Written in 18-Jul-2015

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