Portfolio Diversification Quiz
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Questions and Answers

What are 2 important things to consider when building and managing your asset allocation?

  • Number of stocks and bonds
  • Time horizon and risk tolerance (correct)
  • Investment returns and expenses
  • Market volatility and economic indicators

    • For a goal that's 25 years away, what may be appropriate due to the long time horizon?

  • Higher exposure to real estate investment trusts (REITs)
  • Higher exposure to government bonds
  • Higher exposure to domestic and international stocks (correct)
  • Higher exposure to commodities

    • Why might someone be willing to take on additional risk for a goal 25 years away?

  • Guaranteed high returns in the long term
  • Faster recovery from market declines
  • Assumption of having time to regain lost ground (correct)
  • Lower volatility in the stock market

    • What may be appropriate for a short-term goal with low risk tolerance?

    <p>Higher exposure to bonds and cash equivalents</p> Signup and view all the answers

    Why is risk tolerance an important consideration in asset allocation?

    <p>To align investment choices with an individual's comfort level</p> Signup and view all the answers

    What are the 2 important things to consider when building and managing your asset allocation?

    <p>Time horizon and risk tolerance</p> Signup and view all the answers

    For a goal that's 25 years away, what might be appropriate due to the long time horizon?

    <p>Higher exposure to domestic and international stocks</p> Signup and view all the answers

    Why might someone be willing to take on additional risk for a goal 25 years away?

    <p>Assuming there's time to regain lost ground in the event of a market decline</p> Signup and view all the answers

    What is the benefit of a higher exposure to domestic and international stocks for a long-term goal?

    <p>Long-term growth potential</p> Signup and view all the answers

    How does time horizon influence risk tolerance in asset allocation?

    <p>Longer time horizons may allow for higher risk tolerance</p> Signup and view all the answers

    What is business communication?

    <p>Communication intended to help a business achieve a fundamental goal</p> Signup and view all the answers

    Where does business communication occur?

    <p>Internally and externally</p> Signup and view all the answers

    What can happen with internal and external forms of communication?

    <p>They can come with barriers that prevent the receiver from understanding the information</p> Signup and view all the answers

    What does the word 'communication' derive from?

    <p>The Latin word communis which implies common</p> Signup and view all the answers

    Why is the way people communicate and operate within a business vital?

    <p>It is vital to the success of the company in the business world</p> Signup and view all the answers

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