ABA CTFA Practice Test - Questions Answers, Page 51

If you commit $200 to an investment at the beginning of the year, what is your rate of return for the period?

Insurance coverage provides protection against other uncertainties. Health insurance helps to pay medical bills. Disability insurance provides _____________.

The process of managing a portfolio never stops. Once the funds are initially invested according to the plan, the real work begins in:

A sound portfolio statement helps to protect the client against a portfolio manager's:

The investor's objectives are his or her investment goals expressed in terms of both risk and returns. The relationship between risk and returns requires that goals not be expressed only interms of returns. Expressing goals only in terms of returns can lead to:

Risk tolerance is more than a function of an individual's psychological makeup; it is affected by other factors such as:

___________ means that investors want to minimize their risk of loss, usually in real terms: They seek to maintain the purchasing power of their investment. In other words, the return needs to be no less than the rate of inflation.

Capital appreciation is an appropriate objective when the investors want the portfolio to grow in real terms over time to meet some future need. Under this strategy, growth mainly occurs through capital gains. This is an

The objective for the __________ strategy is similar to that of capital appreciation; namely, the investors want the portfolio to grow over time to meet a future need. Whereas the capital appreciation strategy seeks to do this primarily through capital gains, this strategy seeks to increase portfolio value by both capital gains and reinvesting current income.