Unit 4 EPF quiz

What percentage of professional investors were able to “beat the market” over a 15 year span?

8%

Which is not a benefit of going public?

Loss of company control

What is an IPO?

The first set of stocks that a company offers

Which stock market index tracks 30 of the most important companies?

Dow Jones

Which is not a way for investors to make money?

Buying high an

Which cognitive bias might make you pull out your investments as soon as they start to decline?

Loss aversion

True or False: Investments should be long-term to see the greatest return

True

Which is true about index funds and actively managed funds?

Index funds are passive and tied to a stock market index fund

Which kind of employers offer 403(b)s?

Government/Public Sector

At what age can you currently collect full social security if you were born after 1960?

67

What percentage of your income do experts recommend putting into a 401(k)?

10%

What kind of stocks are under $5 and considered extremely speculative?

Penny Stocks

Why is diversifying assets so important when you are investing?

Diversification helps minimize the risk of your investment

Which retirement account do you pay tax on now so you do not have to pay tax when you withdraw?

Roth IRA

How do you measure the performance of your investments?

Return - Cost

What is one factor that you should NOT take into account when planning for retirement?

Being able to take out a loan when needing extra funds

These stocks are of companies that are in industries that are considered “recession proof” (Ex. Health Care)

Non-cyclical

Which kind of bond is investing in a company that is known to be financially stable?

Investment grade corporate bond

Written Response: …three things to take away from this information?

1. make more the more you invest

2. never too late to start investing

3. although you can make a lot of money with higher investments, you make so much more if you start earlier

Written Response: Warren Buffet…

You make more money in the long run if you make smart decisions rather than making high risk investments