文档介绍：CHAPTER 5
THE ASSET ALLOCATION DECISION
TRUE/FALSE QUESTIONS
(t) 1 Experts suggest life insurance coverage should be
seven to ten times an individual's annual salary3>.
(t) 2 The gifting phase is similar to, and may be
concurrent with, the spending phase.
(t) 3 Long-term, high-priority goals include some form of
financial independence.
(t) 4 The investment performance of a portfolio manager
should pared to the benchmark portfolio.
(f) 5 Risk tolerance is exclusively a function of an
individual's psychological makeup.
(f) 6 An appropriate investment objective for a typical
25-year-old investor is a low-risk strategy, such
as capital preservation or current e.
(f) 7 Marginal tax rate is defined as a person's total
tax payment divided by their total e.
(t) 8 Investment returns of an IRA investment, including
any e, are deferred until the funds are
withdrawn from the account.
(f) 9 For individuals in lower tax brackets, The Roth IRA will provide more after-tax dollars than the regular IRA.
MULTIPLE CHOICE QUESTIONS
(e) 1 The current outlay of money to guard against a
potentially large future loss monly known as
a) Asset management.
b) Portfolio management.
c) Minimizing risk.
d) Loss control.
e) Insurance.
(a) 2 Which of the following is not a life cycle phase?
a) Discovery phase
b) Accumulation phase
c) Consolidation phase
d) Spending phase
e) Gifting phase
(e) 3 Which of the following is not a step in the port-
folio management process?
a) Develop a policy statement
b) Study current financial and economic conditions
c) Construct the portfolio
d) Monitor investor's needs and market conditions
e) Sell all assets and reinvest the proceeds for
at least once a year
(d) 4 Important reasons for constructing a policy
statement include:
a) Helps investors decide on realistic investment goals
b) Create a standard by which to judge the performance of the portfolio mana