Principles of Investment

Which characteristic is most important in determining an investment's level of risk?

Compared to high-risk investments, low- and medium-risk investments are in higher demand because they

Changes in monetary policy have the greatest effect on

What occurs over time as a result of inflation? Check all that apply.

Interest rates generally reflect

Which statement is true of the relationship between risk and return?

If the nominal interest rate is 4.00% and the rate of inflation is 2.25%, what is the real interest rate?

Taxes are often owed on

________ policy involves government changes to spending or taxation to affect the economy.

Why should investors know the difference between nominal and real interest rates?

The nominal interest rate could best be described as the _________ rate.

Which statement best describes how inflation affects the value of investments over time?

An investment with a stable and predictable history will most likely have

The graph shows the effect of inflation. Approximately how much of the initial investment's value would be lost after 15 years at 3% inflation?

If the Federal Reserve decreased the money supply, what would the effects be? Check all that apply.

If an investor has a $5,000 pretax return, the state tax rate is 4.5%, and the federal tax rate is 22.0%, what is the real investment value?