I-As with life insurance, the pricing on annuities depends on

1-life expectancy.

2-current income.

3-inflation.

4-socioeconomic status.

II-Which of the following statements is INCORRECT?

1-Stocks provide a steady rate of return year after year with minimal fluctuations.

2-U.S. government-issued securities are some of the safest securities available.

3-Inflation risk is considered by the market when setting securities prices.

4-Investors with a high degree of risk aversion will generally invest greater amounts in bonds.

III-People who have retired still need to include stocks in their portfolios primarily in order to

1-reduce the impact of inflation on their portfolio and income.

2-decrease the risk in their portfolio.

3-reduce the volatility of their portfolio.

4-increase the liquidity of their portfolio.

IV-The minimum rate of return is usually called the

1-nominal risk-free rate.

2-nominal inflation rate.

3-expected rate of return.

4-expected required return.

V-Municipal bonds are a(n) ________ investment.

1-tax deferred

2-tax exempt

3-guaranteed

4-equity

VI-Which of the following would be an example of a fixed-income investment?

1-Commodities

2-Bonds

3-Stocks

4-Mutual funds

VII-Your accountant has just told you that one of your investments had a capital gain over the year. This would mean that

1-the value of the investment appreciated.

2-the investment paid a large dividend.

3-the investment made a large interest payment.

4-you received a tax refund related to the investment.

VIII-________ is a type of investing strategy in which you purchase a collection of bonds with different maturities spread out over your investment horizon.

1-Laddering

2-Buy-and-hold

3-Indexing

4-DRIP