Investment Game
If you're carrying debt, you should always pay the minimum loan amount so that you can maximize your investment contributions.
False
You should sell all of your investments if the stock market goes down during a recession—especially since the stock market rarely recovers after a recession.
False
Investors with a ______ risk tolerance may have a long time horizon and are usually looking to maximize their returns in the stock market.
High
What does it mean to "invest in yourself"?
Investing in yourself means putting time and money toward your own personal growth.
Which of the following is NOT an example of investing in yourself?
Investing your money in the stock market.
Equity funds, index funds, and market cap equity funds are best for which type of investor?
Investors with a long time horizon.
Fixed income and money market funds are best suited for which type of investor?
Investors with a short time horizon.
If you were looking to invest in a mutual fund with a mixture of growth and safety, what type of mutual fund would you invest in?
A balanced fund
What kind of account would you need to open if you wanted to buy investments like stocks, bonds, and mutual funds?
A brokerage account
Imagine you are 25 years old and have a long investment time horizon. What type of mutual fund would NOT be best for your portfolio?
A money market fund
What is an equity fund?
A mutual fund that is primarily invested in stocks.
Ann is an investor with a short time horizon and low risk tolerance. Which mutual funds would be best for her portfolio?
All of the above
What is a brokerage account?
An account used to buy investments like stocks, bonds, and mutual funds.
Frank is an investor with a long time horizon and high risk tolerance. Which type of mutual fund would be best for his portfolio?
An equity fund
If you were looking to invest in a mutual fund with strong growth, what type of mutual fund would you invest in?
An equity fund
If you're carrying debt that charges a low interest rate, you should prioritize paying off the debt and only make investment contributions when the debt is paid off.
False
Which of the following statements is FALSE?
Both A and B
If you were looking to invest in a mutual fund focused on safety and minimal growth, what type of mutual fund would you invest in?
Both B and C
Imagine you are 5 years away from retirement. What type of mutual funds would be best for your portfolio?
Both B and C
A(n) _______ fund is a mutual fund that is primarily invested in stocks.
Equity
Which type of mutual fund has the highest allocation toward stocks?
Equity fund
If the stock market goes down during a recession, you should sell all of your investments to minimize your losses.
False
Investors with a ______ risk tolerance may have a short time horizon and are usually looking to maintain the value of their investments with minimal growth.
Low
Investors with a ______ risk tolerance may have an intermediate time horizon and are usually looking for a mix of safety and growth in their investment portfolio.
Medium
Which of the following is an example of investing in yourself?
Signing up for an online class.
Why is it important to adjust the asset allocation of your investment portfolio as you get closer to retirement?
To protect your investment earnings in case the stock market goes down.
If the stock market goes down during a recession, you should focus on the long-term horizon and ensure your portfolio is well-diversified to minimize losses.
True
If you're carrying debt that charges a high interest rate, you should prioritize paying off the debt instead of maximizing your investment contributions.
True
Which of the following statements is TRUE?
Your portfolio should have a higher allocation toward bonds and cash equivalents right before you retire.
A _________ account is an account you use to buy investments like stocks, bonds, and mutual funds.
brokerage
