QUESTION 32

1. Unlike a debit card, a credit card permits you to
2. a.earn interest on your outstanding balance.
3. b.spend and pay now.
4. c.spend now and pay later.
5. d.pay now and spend later.

QUESTION 33

1. The volatility of investing in the stock market can be reduced by
2. a.buying and selling stocks frequently.
3. b.investing in the stocks of a few companies.
4. c.investing in a diverse portfolio of stocks.
5. d.investing in high-risk stocks in hopes of large profits.

QUESTION 34

1. Which strategy is most likely to reduce the volatility of returns from stock ownership?
2. a.investing in a few companies that have performed well historically
3. b.buying more shares of your stocks that have risen in price during the last 12 months, while selling those that have fallen
4. c.selling more shares of your stocks that have risen in price during the last 12 months, while buying those that have fallen
5. d.regular investing into a diverse portfolio of stocks over a lengthy period of time

QUESTION 36

1. What are the odds that a person can select a managed fund that will do better than the market average over the long run (e.g. a 20-year time period)?
2. a.The odds are very low, about one in fifty.
3. b.There is about a fifty-fifty chance of selecting a managed fund that will outperform the market average.
4. c.With enough research, the odds are high, about 85 percent of selecting a managed fund that will outperform the market average.
5. d.Managed funds will almost always do better than the market average over the long run.

QUESTION 38

1. What is the lesson to be learned from comparing the performance of managed funds with indexed equity funds?
2. a.Only experts can hope to be highly successful investors in the stock market.
3. b.An ordinary investor is unlikely to earn an attractive rate of return in the stock market.
4. c.An ordinary investor can earn an attractive rate of return in the stock market, but only if they are willing to put substantial time and effort into research.
5. d.Indexed equity funds make it possible for the ordinary investor to earn an attractive rate of return in the stock market.

QUESTION 38

1. What is the lesson to be learned from comparing the performance of managed funds with indexed equity funds?
2. a.Only experts can hope to be highly successful investors in the stock market.
3. b.An ordinary investor is unlikely to earn an attractive rate of return in the stock market.
4. c.An ordinary investor can earn an attractive rate of return in the stock market, but only if they are willing to put substantial time and effort into research.
5. d.Indexed equity funds make it possible for the ordinary investor to earn an attractive rate of return in the stock market.