Chapter 9 quiz
The “median” means the middle number of a set of numbers. (Flashback: So the median is always in the 3rd quintile.) What’s the median value of stock held by stockowners? (The value given was in 2019.
“Among elderly Social Security beneficiaries, 21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income.” If $18,528 is 90% of your income, then what’s your income?
According to Jaspreet, most people don’t invest because it takes two things to make it work. What are those two things?
Do you foresee someday buying a house? Are you willing to live in places that aren’t as nice as you could afford in order to save money toward a house?
Looking at the 5-year graph there was one very big dip in the S&P 500 level. When was it and what do you suppose caused it?
Pick one of the top three index funds from the Investopedia site (and tell me which you chose). If you had $1,000 for a year in your choice, how much would the fees cost you to the nearest penny? (Use the expense ratio, and know the fees are subtracted from your account automatically.)
Rank mutual funds, index funds and ETF’s from most-favored to least-favored in accordance with the video which compares and contrasts them. (Dr. Stewart agrees with the rankings suggested by the video.)
SEC graph interpretation: The account starts with $100,000 and climbs to somewhere between about $179,000 and $208,000. So depending on the fees, the money could double. How much money is the investor personally adding to the account during those 20 years?
In Jaspreet’s example, 20 years of investing $250 per month into an index fund resulted in what account balance at the end (according to him)? Using the “=fv(” function in Excel, what’s the real answer (assuming no fees)?
‘If you have a bond mutual fund and the bonds in the fund are making interest payments every 6 months, what are your two choices of what to do with those payments?
If the return investors demand from an investment depends on the risk of the investment, then would bonds from different companies also have to pay differing interest rates?
Wait, if there are mutual funds for bonds, does this mean you can invest $500 into a bond fund and own little pieces of a wide variety of bonds at the same time?
Describe the problem if your investments grow, but grow more slowly than the inflation rate.
Describe two physical risks of investing in the collectibles known as sneakers.
How many companies are considered “large-cap” versus “medium-cap” versus “small-cap?”
To grossly generalize, if Person J has a portfolio of 90% stocks, 10% bonds, and Person T has a portfolio of 40% stocks, 60% bonds, then which one is more likely to drive faster on the highway?
Wait, weren’t these the same three companies listed first in one of this chapter’s Investopedia articles? Which chapter notes number references that article?
Describe the most recent unexpected expense you had to pay.
What’s Jaspreet’s “Rule of 5?”
These videos are focused on your most precious resource in life. What is that?
An investor tries to convince you to follow his new investing model, called “Damn the Torpedoes.” In this model, investors play it more safely while nurturing their small nest eggs (small investment account balances), and then take on more risk as the account grows and more risk can be afforded. After all, accounts with higher balances can afford to take bigger risks. Sounds good, right?
Explain why taking on higher levels of risk later is equivalent to taking on higher levels of risk in the beginning instead.
