Question

1. when it comes to investing in the stock market, which of the following statements is true?

options (partially visible due to image quality)

1. in 2018, agatha set up a spreadsheet with a list of 10 stocks and 4 bond funds she’d just purchased for her investment portfolio. she recorded her purchase price per share and the number of shares she’d bought of each asset. she hasn’t bought or sold any shares since that day. she’s interested to know how much money she’d gain or lose if she sold all the shares today. what new data would she need in order to determine the return on investment for her entire portfolio?

options:
the price per share for each of her investments today
the total returns of the us stock market over that same time frame
the number of shares other investors have purchased over that same time frame
the federal interest rate, minus inflation since the day she purchased the shares

Explanation:

Question 6:

Step1: Evaluate each option

• "There is little to no risk to investing in the stock market": False, stock market has inherent risk.
• "It is easy to make money by 'beating the market' in buy/sell stocks": False, consistent market outperformance is difficult for most investors.
• "The whole stock market 'value' can go up even if some stock values go down": True, broad market indices can rise when most stocks gain, even if a subset decline.
• "It is better to wait until retirement age to begin investing in the stock market": False, early investing benefits from compound interest.

Question 7:

Step1: Define portfolio return

Return = $\frac{\text{Current Total Value} - \text{Initial Total Value}}{\text{Initial Total Value}}$

Step2: Identify missing data

Initial value is known (purchase price × shares). Current value needs today's price per share × shares. Thus, today's per-share prices are required.

Answer:

1. The whole stock market 'value' can go up even if some stock values go down
2. The price per share for each of her investments today