FREE Investment (Risk Tolerance) Questions and Answers
Your possessions plus $1,000 have been provided to you. You now have the option to select between:
A. A 50% chance to gain $1,000 and a 50% chance to gain nothing
B. A sure gain of $500
Correct!
Wrong!
Some experts are predicting prices of assets such as gold, jewels, collectibles, and real estate (hard assets) to increase in value; bond prices may fall, however, experts tend to agree that government bonds are relatively safe. Most of your investment assets are now in high-interest government bonds. What would you do?
A. Sell the bonds, put all the money into hard assets, and borrow additional money to buy more
B. Sell the bonds and put the total proceeds into hard assets
C. Hold the bonds
D. Sell the bonds, put half the proceeds into money market accounts, and the other half into hard assets
Correct!
Wrong!
How would your best friend characterize you as a risk-taker in general?
A. A real Gambler
B. Willing to take risks after completing adequate research
C. Cautious
D. A real risk avoider
Correct!
Wrong!
If you had to invest $20,000, which of the following investment choices would you find most
appealing?
A. 60% in low-risk investments 30% in medium-risk investments 10% in high-risk investments
B. 30% in low-risk investments 40% in medium-risk investments 30% in high-risk investments
C. 10% in low-risk investments 40% in medium-risk investments 50% in high-risk investments
Correct!
Wrong!
The danger that the necessary return on investor capital won't be achieved is known as the _____ risk.
Correct!
Wrong!
You recently finished setting aside money for a "once-in-a-lifetime" trip. You lose your job three weeks before you're scheduled to depart. You would:
A. Cancel the vacation
B. Take a much more modest vacation
C. Go as scheduled, reasoning that you need the time to prepare for a job research
D. Extend your vacation, because this might be your last chance to go first-class
Correct!
Wrong!
Given the best and worst-case returns of the four investment choices below, which would you prefer? (Select only one)
A. $200 gain best case; $0 gain/loss worst case
B. $800 gain best case; $200 loss worst case
C. $2,600 gain best case; $800 loss worst case
D. $4,800 gain best case; $2,400 loss worst case
Correct!
Wrong!
Let's say a relative left you a $100,000 bequest and specified in their will that you invest EVERY penny in one of the options listed below. Which one would you choose?
A. A savings account or money market mutual fund
B. A mutual fund that owns stocks and bonds
C. A portfolio of 15 common stocks
D. A savings account or money market mutual fund
Correct!
Wrong!
Which of the following words comes to mind first when you hear the term "risk"?
A. Uncertainty
B. Opportunity
C. Thrill
D. Loss
Correct!
Wrong!
How at ease are you with investing in equities or stock mutual funds in terms of experience?
A. Not at all comfortable
B. Somewhat comfortable
C. Very comfortable
Correct!
Wrong!
You have all you possess, plus an additional $2,000, given to you. You now have the option to select between:
A. A sure loss of $500
B. A 50% chance to lose $1,000 and a 50% chance to lose nothing
Correct!
Wrong!
Vlad the appraiser will evaluate a complex of apartments that consistently generates revenue and incurs costs. Which approach is most likely to be employed by him?
Correct!
Wrong!
On a TV game show, you can pick one of the options below. Which one do you prefer?
A. A 5% chance at winning $100,000
B. A 25% chance at winning $10,000
C. $1,000 in cash
D. A 50% chance at winning $5,000
Correct!
Wrong!
What would you do if you were given $20,000 to invest on the spur of the moment?
A. Deposit it in a bank account, money market account, or an insured CD
B. Invest it in safe high-quality bonds or bond mutual funds
C. Invest it in stocks or stock mutual funds
Correct!
Wrong!
A seasoned geologist who is a dependable friend and neighbor is assembling a group of financiers to support a gold exploration project. If the business is successful, the investment might be recovered 50 to 100 times over. The entire investment is useless if the mine doesn't work out. The success rate, according to your acquaintance, is barely 20%. How much would you invest if you had the cash?
A. Nothing
B. One month's salary
C. Three month's salary
D. Six month's salary
Correct!
Wrong!
Shana is interested in making a purchase for a local shopping mall. What kind of trading sector does she intend to cover?
Correct!
Wrong!