Which of the Following Are Commonly Thought to Be Bad

question 60

Multiple Choice

Which of the following are commonly thought to be bad general investment guidelines?I) Don't try to outguess the market, buying and holding generally pays off.II) Diversify investments to spread risk.III) Investments should be highly concentrated in your company's stock.IV) 401K money is best placed in money market accounts because risk is very low.V) Investments should be allocated to stocks, bonds, and money-market funds.

• A) I, III, and IV
• B) I, II, and IV
• C) II, IV, and V
• D) III and IV
• E) I, II, IV, and V

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Definitions:

Selling Price

The amount of money a buyer pays to purchase a product or service.

Call Option Contract

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific timeframe.

Underlying Asset

The financial asset upon which a derivative instrument, such as an option or a futures contract, is based.

Floating-Rate Debt

Floating-rate debt is a type of loan or security that has a variable interest rate, which adjusts periodically based on a benchmark or index rate.