A prudent investor:Does not have to consider the tax effect of long-term gains.Evaluates his/her investments on an after-tax basis.Studiously avoids income-shifting among funds.Knows that a drop in the dividend payout signals a stronger firm.
Beta is commonly used as a relative measure of risk. It measures:Standard deviation of a stock’s price.The expected total returns of a diversified portfolio.The unsystematic risk component of an investment.The risk of a security or portfolio relative to the overall market.
If you call your broker to purchase a "round lot" you are:Buying a mutual fund of 100 different stocks.Authorizing him/her to decide how many shares to buy.Negotiating commissions on future purchases and sales.Purchasing 100 shares of a specific stock.
Determining total return typically utilizes the:Inflation-adjusted annual performance of all mutual-funds.Annual capital gain plus dividend payout of a stock or fund.Math skills learned in college-level calculus courses.Dividend yield on the Dow Jones Industrial Average.
Junk bonds:Are bonds issued by junk yards.Are sometimes called "high yield bonds."Are less risky than government bonds.Are not actually bonds.
Variable life insurance:Offers tax deferral.May provide higher return potential and greater risk than a whole life policy.Allows you to invest a portion of the premium in various subaccounts.All of the above.
A benchmark asset, commonly considered by investors to be risk-free:Treasury Bill (T-Bill).Share of preferred stock.A EurobondA junk bond.
Since the mid-1920s inflation in the United States has averaged:About 3 percent.About 7 percent.About 10 percent.About 12 percent
