Module 4 Quiz
According to Kobliner, there are around _____ socially responsible investing mutual funds and ETFs.
400
The two major categories of money market funds are taxable and tax-exempt.
True
According to Kobliner, there are more than _____ financial firms operating in the United States.
800
Kobliner recommends that you invest in an index fund that tracks one of the following except
Dow Jones Industrial Average
A bond fund's prospectus is the only document that contains information about the kind of bonds in which it invests.
False
Actively managed bond funds have higher average expense ratios than actively managed stock funds.
False
Funds with unusually high returns in the past tend to perform better in the future than others that have performed poorly.
False
Historically, money market instruments such as Treasury bills have been much better in providing returns above inflation than stocks and bonds.
False
If you do not have enough funds to create the perfect investment mix right away, you should begin by investing in a bond fund.
False
Kobliner recommends that you put about 30% of your portfolio in non-US stocks.
False
Money market instruments are issued to supply cash to large companies or governments for long periods of time.
False
New information that leads investors to believe a company will be less profitable than previously thought would usually cause its share price to rise.
False
Series I or I Bonds pay interest that is not taxed at the federal, state or local level.
False
The following is true about money market mutual funds except
they are the safest mutual fund
See yourself growing old can help you save more money than you otherwise would.
True
The field of behavioral economics has discovered many ways your brain can sabotage your investment success.
True
The interest paid by a bond is computed using its coupon rate.
True
The primary way to profit from a stock is through the capital gains earned when it is sold for more than the price you paid.
True
The stock price of a firm may fluctuate for reasons unrelated to its future profitability.
True
The yield of a money market fund is essentially equivalent to the interest rate paid on a savings account.
True
Whatever your personal circumstances, Kobliner thinks funds are probably the best investment vehicle at this stage in your life.
True
When a bond reaches the end of it term, the bondholder is entitled to get back its principal.
True
When making a decision about the proper investment mix, it is important to review all types of investments you own, including those in your 401(K) plans.
True
Long-term (10-20 years or longer) goals are best met by stock and bond funds, not money market funds.
True
Money market mutual funds are also known as money funds.
True
A bond is an IOU issued by companies and government agencies just like a money market instrument.
True
Bonds can increase in value when interest rates fall.
True
Bonds have longer terms than money market instruments.
True
Brokerage firms and financial advisors tend to push mutual funds with loads and high fees.
True
Brokerage firms tend to push mutual funds with loads and high fees with high minimum investment requirements.
True
Experts at Morningstar find index funds have beaten their actively managed peers the majority of the time in the past 35 years.
True
High-yield bonds are also known as "junk" bonds and they are issued by financially troubled firms.
True
Historically, a common advice from investment experts is to keep about 50% of your assets in stock funds, 30% in bond funds and 20% in money market funds or bank savings accounts.
True
It is generally impossible to get high rates of return without accepting a high level of risk.
True
Loads are similar to commissions and are generally paid to advisors or brokers who sell them.
True
