QUESTION Investment strategies are all based on balancing what two concepts? What will be an ideal response? ANSWER Answer: Every investment strategy seeks to successfully balance the potential risks of particular investments against the possible returns that can be gained from the investment. Explanation: Investing is all about risks and returns. An aggressive mutual […]
QUESTION What type of stock prices tend to be more volatile, and why? What will be an ideal response? ANSWER Answer: Prices for growth stocks are more volatile. These are usually for small, innovative new companies in hot industries with a lot of change and uncertainty. Explanation: Growth stocks prices tend to be more […]
QUESTION Which of the following conclusions can be drawn most directly from the prompt? A) Female investors always use better judgment than male investors. B) Handling IPOs can be profitable for investment banks, but also risky. C) Technology-related stocks are likely to increase in value over the next decade. D) Young people are a good […]
QUESTION Which of the following, if true, most directly supports Brett’s position, that Olympic Daniels should purchase a large share of the Textmoor IPO? A) Textmoor’s tablet is designed to be significantly more efficient and versatile than its competitors’ products. B) Due to their high testosterone levels, males make more aggressive stock decisions than females. […]
QUESTION Which of the following, if true, is most helpful in resolving the difference of opinion between Brett and Latisha? A) A prototype of Textmoor’s tablet was displayed recently at a major international technology fair. B) Most investment banks in the last decade have profited by handling info-tech IPOs. C) Two other investment banks have […]
QUESTION Which of the following assumptions most clearly underlies Darrell’s plan? A) Most young employees are willing to save small amounts of every paycheck toward their retirement. B) Over the long haul, stock-weighted portfolios will clearly outperform bond-weighted portfolios. C) Recent stock market crashes are the main reason most young employees are reluctant to invest […]
QUESTION Which of the following points out a hidden flaw in Darrell’s thinking? A) In addition to owning mutual funds, many young investors purchase individual stocks through discount brokers. B) While the stock market declined sharply in 2008-2009, it came back strongly in 2010-2011. C) In recent years, investments in precious metals have appreciated more […]
QUESTION Which of the following, if true, weakens Darrell’s management strategy? A) Economics experts predict that Social Security will be bankrupt by 2050. B) Surveys show that four out of five young investors are mostly interested in long-term returns. C) Bonds have outperformed stocks by 8 percent over the last ten years. D) The savings […]
QUESTION The Dow Jones Industrial Average gets the most attention from the mainstream press. Large drops or increases in the average, or achieving numerical milestones, are often big news stories. So why do industry professionals and educated investors feel the Dow doesn’t accurately represent the market? What will be an ideal response? ANSWER Answer: […]
QUESTION Which of the following, if true, most directly strengthens Darrell’s strategy? A) Fewer than 15 percent of young investors check the performance of their mutual funds regularly. B) Darrell has more than 25 years’ experience in financial management. C) Government and investment-grade bonds have a very low probability of default. D) Each time Leonid […]
