Which of the Following Are Advantages of the Buy and Hold

question 27

Multiple Choice

Which of the following are advantages of the buy and hold strategy?
I. rapid accumulation of wealth
II. low transaction costs
III. capital gains taxed at the long-term rate
IV. Portfolio requires less time and energy to manage than for most other strategies.

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

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Definitions:

Rate of Return

The increase or decrease in value of an investment during a specific time frame, represented as a proportion of the investment's initial cost.

Compounded Annually

Interest on an investment is calculated once per year and added to the principal, allowing the investment to grow at an increasing rate.

Investments

Resources allocated with the intention of generating future benefits, such as income or revenue growth.

Graph

A visual representation of data, showing relationships between two or more variables typically on two axes.