In General, a Young Saver Should Choose a Financial Portfolio

question 70

Multiple Choice

In general, a young saver should choose a financial portfolio based on

• A)maximizing expected return with only limited concern for variability.
• B)minimizing variability with only limited concern for expected return.
• C)equal concern for expected return and variability.
• D)maximizing the number of tax-free securities included.

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Definitions:

Certificate of Deposit

A savings certificate issued by a bank to a person depositing money for a specified length of time, typically earning a fixed interest rate.

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in a year or less, offering a secure, low-risk investment option.

Petty Cash Fund

A little bit of readily available money intended for covering small costs.

General Journal Entry

A record in the general journal that documents financial transactions, including date, accounts affected, amounts, and description.