Investment Jobs Investment Strategy Test 3

Question 1

An investor with a 30-year horizon and high risk tolerance should generally weight toward:

Accepted Answer

Equities for long-term growth

Answer

Long horizons and high risk tolerance favor equities, which offer greater growth potential over time.

Question 2

What is the main risk of a concentrated portfolio?

Accepted Answer

Outsized losses if one holding underperforms

Answer

Concentration ties results to a few holdings, magnifying losses if they decline.

Question 3

A growth investing strategy emphasizes companies with:

Accepted Answer

Above-average earnings growth potential

Answer

Growth investing targets firms expected to grow earnings faster than the market.

Question 4

Asset allocation refers to:

Accepted Answer

Dividing investments among asset classes like stocks, bonds, and cash

Answer

Asset allocation is the mix of asset classes chosen to balance risk and return.

Question 5

Which metric measures a stock's volatility relative to the overall market?

Accepted Answer

Beta

Answer

Beta gauges how much a security moves relative to the broader market.

Investment Practice Test