HIN $2000-$ SPRING $202$A$-$SECTION $2-$ Final EXAM

$7$ If you think the stock market is going to sharply decline, financlal planners generally recommend that you:

a$.$ Sell all your stocks

b$.$ Sell $50\%$ of your stocks

c$.$ sell $25\%$ of your stocks

d$.$ Sefl $15\%$ of your stocks

e$.$ Stick with your long$-$term stock$/$bond asset allocation

$8.$ The government wants to encourage long$-$term investing rather than short$-$term speculating. Longterm capital gains get favorable tax treatment. "Long$-$term" is defined as:

a$.S7x$ rnonths or greater

b$.$ One year or more

c$.$ Three years or more

d$.$ Five years or more

e$.$ Ten years or more

$9.$ The earliest you can begin receiving Social Security income is age $62.$ If you wait until age $70,$ though, you will get about:

a$.,25\%$ more each month

b$.,235\%$ more each month

c$.45\%$ more each month

d$.75\%$ more each month

$10.$ When you "rebalance" your portfolio

a$.$ You shift between different stocks depending upon their current performance outlook

b$.$ You emphasize long term bonds when you expect interest rates to decline

c$.$ You shift between tech stocks and pharmaceutical stocks when you expect one group will split their stocks at least $2-$for$-1.$

d$.$ Buy $/$sell stocks or bonds when one asset class becomes overweighted$/$underweighted relative to your long$-$term strategic asset allocation.

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