"Interest"ing
What is 1% of $100
$1
How long do bull and bear markets for stocks generally last?
A) Bears last two times longer than bulls
B) Bulls last four times longer than bears
C) They’re just about equal
Answer: B | While sustained market declines may feel like they last forever, they’re generally brief compared with sustained periods of gain. Over the past 50 years, for example, bull markets have lasted an average of 1,820 days, compared with just 433 days for bear markets.3 In other words, those with a 20-year investing horizon can afford a bad year or two, while those with far fewer years probably can’t. So be sure to stay on top of your portfolio—and make adjustments as your time horizon and circumstances change.
True or False: IRA contributions are not always tax-deductible?
True. Roth IRA contributions are not tax-deductible and depending on your income and if you have a 401k plan a traditional IRA may not be tax-deductible
When interest rates rise, current bonds typically do what?
A) Rise
B) Fall
C) Stay the same
B Fall. Bonds and interest rates have an inverse relationship.
Over the past 25 years, which investing method has consistently generated the worst returns for long-term investors?
A) Investing a lump sum at market peaks
B) Investing a lump sum at market troughs
C) Staying in cash and not investing at all
Answer: C | Even investors with terrible timing, who entered the market when prices were highest, came out ahead of those who stayed on the sidelines.
True or False: Once you reach the required age, withdrawals from 401k plans are tax-free.
False. There will not be any penalty however in a traditional 401k plan you will pay taxes at ordinary income rates.
True or false: stocks are always riskier than bonds?
False. Typically stocks are riskier however some bonds can carry a considerable default risk.
Over the long term, what’s likely to be the better investment: stocks or your home?
A) Stocks
B) Your home
Answer: A | Homes and land have actually underperformed the stock market over the past century—significantly so. According to Yale University economist Robert Shiller, inflation-adjusted home prices rose an average of 0.6% a year from 1915 to 2015. 4 By contrast, the Dow Jones Industrial Average offered an average real total return of 6.8% a year during roughly the same period (1914–2014).
At what age can you typically start withdrawing from tax-deferred retirement plans without a penalty?
59.5
4. Which of the following statements about bonds are true?
A) When interest rates rise, bond prices rise
B) Bonds never outperform stocks
C) Bonds don’t make sense for young or aggressive investors
D) All of the above
E) None of the above
Answer: E | Despite the fact that the U.S. bond market is nearly twice the size of the U.S. stock market, bonds are still a relatively misunderstood investment vehicle. Many people incorrectly assume bonds are only for retirees or extremely conservative investors, when in reality there are many different kinds of bonds with varying benefits, risks and uses.
A 25-year-old who invests $100 per month and sees that investment grow 6% per year will accumulate $138,000 by age 60.2 Which of the following scenarios would result in a similar portfolio balance?
A) A 35-year-old who invests $200 per month until age 60
B) A 45-year-old who invests $480 per month until age 60
C) A 55-year-old who invests $1,990 per month until age 60
D) All of the above
Answer: D | The sooner you start investing, the more you can benefit from the power of compounding—and the less you’ll need to set aside along the way.. In fact, experts generally agree that if you start in your 20s, investing 10% of your income each month should be enough to build a comfortable retirement portfolio, whereas starting in your 30s means you’ll need to save and invest 15%–20% of your income to achieve the same results.
True or False: Mutual funds are guaranteed by the Securities and Exchange Commission?
False
What is the limit on FDIC insurance per depositor at any one bank?
$250,000
What does the Sharpe Ratio measure?
A) A company’s earnings before interest, taxes, depreciation and amortization relative to its stock price
B) A mutual fund’s return relative to its benchmark
C) The return a mutual fund manager produced relative to the risk he or she took to earn that return
Answer: C | Successful mutual fund managers produce returns in excess of the risks they take, and that’s effectively what the Sharpe Ratio measures. The higher the number, the better a fund’s risk-adjusted returns. Schwab’s online mutual fund screener (available at schwab.com/fundscreener) can sort funds by their Sharpe Ratio, highest to lowest. But remember: The Sharpe Ratio is just one measure; you should consider other factors—like fees, sector exposure and your overall asset allocation—before making a decision.
Who is the best financial advisor in the whole world?
Aaron Quinn, if any other names were mentioned minus -1000 points.