"Answers to Lowell Sun Investment Quiz"
1. Which country is considered an emerging market?
e) All of the above
f) C and D only
Correct Answer: e) All of the above
2. The IRS allows employees over the age 59 1/2 to roll their current employers 401k into an IRA while they are still working.
Correct Answer: a) True
3. Over the twenty-year period from 1981 – 2000, gold____.
a) Gained 570 percent
b) Lost 57 percent
c) Gained 170 percent
d) Lost 17 percent
Correct Answer: b) Lost 57 percent
4. Index funds have outperformed _____of all actively managed U.S. stock mutual funds over the past 10 years.
Correct Answer: c) 83%
Source: 2015 SPIVA report
5. Which asset class had the highest compound return from 2000 – 2015?
a) U.S. bonds
b) U.S. stocks
c) International stocks
Correct Answer: a) U.S. Bonds
U.S. bonds: 5.3%
U.S. stocks: 4.0%
International stocks: 2.7%
6.A $100,000 portfolio that gains 25% in year one, and loses 20% in year two would be worth_____.
Correct Answer: a) $100,000
A $100,000 portfolio that gains 25 percent ($25,000) in year one is worth $125,000.
A 20% loss on $125,000 (-$25,000) in year two, reduces the portfolios value back to $100,000.
7. According to Morningstar; what is the best predictor of a mutual funds future performance?
a) A funds past performance
b) A funds expense ratio
c) A funds star ratings
Correct Answer: b) a funds expense ratio
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