Principles of Investment

Question 1

The graph shows the effect of inflation.Approximately how much of the initial investment’s value would be lost after 15 years at 3% inflation?

Revolt · Accepted Answer

40%

Question 2

Which statement is true of the relationship between risk and return?

Revolt · Accepted Answer

The greater the risk, the greater the potential return.

Question 3

Which statement best describes how inflation affects the value of investments over time?

Revolt · Accepted Answer

It decreases the value of money.

Question 4

[BLANK]

Revolt · Accepted Answer

Fiscal

Question 5

Taxes are often owed on

Revolt · Accepted Answer

investment returns.

Question 6

If an investor has a $5,000 pretax return, the state tax rate is 4.5%, and the federal tax rate is 22.0%, what is the real investment value?

Revolt · Accepted Answer

$3,675

Question 7

Which characteristic is most important in determining an investment’s level of risk?

Revolt · Accepted Answer

predictability

Question 8

actualfutureinflatedstated

Revolt · Accepted Answer

stated

Question 9

Compared to high-risk investments, low- and medium-risk investments are in higher demand because they

Revolt · Accepted Answer

are considered safer.

Principles of Investment Answers