6.0 Exam - Jennifer Pariseau | Biblioteka

3

Solve for x: 2 ·4^x +7=135

x=2

x=3

x=4

x=5

3

The data points below represent the total assets invested in index funds in the US each year since 1993. Analyze the results of the exponential regression model shown. Which of the following statements is true?

A linear regression model would likely have a higher r^2 value

The assets managed by index funds have grown by approximately 14.91% per year

The model is not a good fit for the data points because the r^2 value is close to 1

The model predicts that US index funds will manage approximately $1.7 trillion in assets in 2023

3

Which of these functions has an asymptote at y = 2?

a

b

c

d

3

Look at the graph. Which of the four functions has the smallest value for b (Hint: Smallest Growth Factor)?

a

b

c

d

3

Evaluate

3

4

10

27

3

Kendall completed her med school training 10 years ago and is now a successful highly-paid surgeon at a major hospital. What type of account would be most beneficial for Kendall to use to start saving for retirement, so she can enjoy time off after a stressful career?

A regular brokerage account, because tax advantages don’t matter that much

A Roth IRA, because she can pay taxes on the money now and take it out tax-free later

Social Security, because she will pay into it throughout her career

A traditional 401(k), because it will reduce her taxable income now

3

Each of the following factors impacts how much money you will have available at retirement EXCEPT…

How often you log into your online brokerage account

What percent of your income you invest each month

How old you are when you start investing

Whether you qualify for Social Security benefits

3

Ash remembers learning about both 401(k)s and IRAs in his personal finance class during high school. He’s early in his career, and he can really only afford to fund one type of account with about $100 per month right now. What should he do?

Fund a 401(k) because his employer is offering a match, up to 3% of his salary

Fund a savings account, because it will guarantee an interest rate, rather than leaving his retirement up to a risky investment option

Fund neither account, because $100 does not meet the minimum requirements for any retirement account type

Fund a traditional IRA, because it will offer him, by far, the best tax advantages

3

Which type of fund is usually passively managed, can be traded throughout the day, and is bought directly from other investors like a stock?

Target date fund (TDF)

Robo-advisor

Exchange-traded fund (ETF)

Mutual fund

3

If you invest money into an index fund that tracks the Dow Jones Industrial Average, you would expect…

To outperform most other investors because of the elite status of this index

Your fund manager to contact you on a regular basis with suggestions on whether to buy or sell

A lot of high fees, because there are only 30 companies in that index

Your returns to track the performance of 30 large US companies

3

Which fund will most working American citizens have access to at retirement?

Social Security

A pension plan

A traditional IRA

A Roth IRA

3

Alma recently started investing in a target-date fund with a planned retirement date that is 38 years in the future. How is the portfolio in her TDF most likely allocated?

Half stocks and half bonds

Her TDF allocation will depend on the specific securities she selects

Majority bonds and a small percentage of stocks

Majority stocks and a small percentage of bonds

3

Alberto has decided to invest his retirement money into a mutual fund filled with mid-sized US companies. The fund manager is…

A CEO at one of those midsize companies

The person who selects which stocks to include in the fund

The website where Alberto logs in to check his fund’s value

The budgeting software Alberto uses to make sure he has enough saved every month

3

The S&P 500 is…

An index of the 500 largest publicly-traded companies in the world

An index of the 500 largest publicly-traded companies in the US

An actively managed mutual fund

A diverse collection of stocks and bonds

3

All of the following are true about robo-advisors, EXCEPT…

Robo-advisors generally invest your portfolio based on your goals and risk tolerance

Robo-advisors use an algorithm to automate the investing process

Robo-advisors generally have lower fees than a traditional financial advisor

Robo-advisors generally have a higher account minimum than a traditional financial advisor

3

All of the following are factors to consider when opening a brokerage account EXCEPT

The location of the brokerage company

Who will manage the account

Your investing goals

Fees that will be charged

3

Which statement about the investment fees associated with mutual funds is true?

Fees are typically set at 10 to 15%, annually, of the amount you have invested

Fees, compounded over the life of your investment, can substantially decrease your returns

You’ll only pay fees to your fund manager if your portfolio has a return over 5%

You’ll pay a one-time fee when you start your investment portfolio with a mutual fund

3

In 2022, Noah decided to start investing in a target-date fund at Alpine brokerage. They are 24 years old, have been working for 5 years, and are planning on retiring at 67. Which target-date fund should they choose?

Alpine Target Retirement 2060 Fund

Alpine Target Retirement 2065 Fund

Alpine Target Retirement 2070 Fund

Alpine Target Retirement 2075 Fund

3

Zora has $5,000 to invest. When assessing her goals, she decides that she wants to create a low-risk, low-volatility portfolio. Based on this assessment, a good strategy for Zora would be:

Lump Sum Investing

After Tax Averaging

Dollar-Cost Averaging

Average Paycheck Investing

3

Which of the following is an example of the bias of Chasing Trends?

Buying stock in an industry that is not represented in your portfolio to increase diversity

Researching the long term growth strategy of a company

Buying cryptocurrency because you saw a headline about it reaching its highest price ever

Buying a stock when it has hit its lowest price of the year

null

10

5

Is this model a good fit for the data? Why or why not?

5

Antonina goes on Wheel of Fortune and wins $12,000 after taxes. She decides that she will invest this money with the goal of putting a $20,400 down payment on a house. She puts the money in a mutual fund that has had a historical return of 7.5%.

5

7

8