why is it important for you to understand your risk tolerance before you start investing? its recommended…

why is it important for you to understand your risk tolerance before you start investing? its recommended that people with a low risk tolerance shouldnt invest at all you should tailor your investment portfolio so that it assumes an amount of risk you are comfortable with it helps you decide if you want to participate in your employers match program for your 401(k) if you have a high risk tolerance, you may be eligible for lower fees since you wont care if your portfolio drastically loses value 11 multiple choice 5 points katrina works for pennys pickles, which offers a 401(k) match for up to 3% of her salary, which is $65,000 per year. in her budget, she only has $150 per month available to save for retirement. what should she do? contribute $75/mo to her 401(k) and $75/mo to an ira, so that shes diversified save the $150/mo in a bank account until she has enough to max out her 401(k), and then invest opt out of the 401(k) plan since she doesnt have much to contribute; use the money elsewhere in her budget contribute the full $150/mo to the 401(k) because her company will match that full amount, \doubling\ her investment every month 12 multiple choice 5 points sam is 22, just started his first full - time job, and is selecting his investments through his companys 401(k) plan. why might a target date fund (tdf) be a good option for sam? a tdf is actively managed by a fund manager but comes with low fees a tdf is insured by the federal government, so sams money is protected even if the fund performs poorly a tdf will automatically adjust his asset allocation based on the retirement year he has chosen a tdf buys a single stock and bond so that beginner investors can practice day trading

why is it important for you to understand your risk tolerance before you start investing? its recommended that people with a low risk tolerance shouldnt invest at all you should tailor your investment portfolio so that it assumes an amount of risk you are comfortable with it helps you decide if you want to participate in your employers match program for your 401(k) if you have a high risk tolerance, you may be eligible for lower fees since you wont care if your portfolio drastically loses value 11 multiple choice 5 points katrina works for pennys pickles, which offers a 401(k) match for up to 3% of her salary, which is $65,000 per year. in her budget, she only has $150 per month available to save for retirement. what should she do? contribute $75/mo to her 401(k) and $75/mo to an ira, so that shes diversified save the $150/mo in a bank account until she has enough to max out her 401(k), and then invest opt out of the 401(k) plan since she doesnt have much to contribute; use the money elsewhere in her budget contribute the full $150/mo to the 401(k) because her company will match that full amount, \doubling\ her investment every month 12 multiple choice 5 points sam is 22, just started his first full - time job, and is selecting his investments through his companys 401(k) plan. why might a target date fund (tdf) be a good option for sam? a tdf is actively managed by a fund manager but comes with low fees a tdf is insured by the federal government, so sams money is protected even if the fund performs poorly a tdf will automatically adjust his asset allocation based on the retirement year he has chosen a tdf buys a single stock and bond so that beginner investors can practice day trading

Answer

Brief Explanations:

  1. Primer pregunta: Es importante entender la tolerancia al riesgo para adaptar el portafolio de inversiones al nivel de riesgo con el que uno se sienta cómodo. Las otras opciones son incorrectas: no se recomienda que las personas con poca tolerancia al riesgo no inviertan en absoluto; la tolerancia al riesgo no influye en la participación en un programa de ahorro 401(k) de la empresa; y no hay relación entre la tolerancia al riesgo y las tarifas.
  2. Segunda pregunta: Katrina debe contributing the full $150/mo to the 401(k) porque su empresa le hará un aporte igual, lo que "dobla" su inversión mensual. Las otras opciones no son óptimas: la diversificación no es la mejor opción en este caso; guardar en una cuenta bancaria no aprovecha el aporte de la empresa; y no es buena idea optar fuera del plan 401(k).
  3. Tercera pregunta: Un fondo de fecha objetivo (TDF) ajustará automáticamente la asignación de activos de Sam según el año de jubilación que haya elegido. Las otras opciones son incorrectas: no todos los TDF son administrados activamente por un gerente de fondos con bajas tarifas; no están asegurados por el gobierno federal; y no se usan para la operación de día - trading, sino para la jubilación.

Answer:

  1. You should tailor your investment portfolio so that it assumes an amount of risk you are comfortable with
  2. Contribute the full $150/mo to the 401(k) because her company will match that full amount, "doubling" her investment every month
  3. A TDF will automatically adjust his asset allocation based on the retirement year he has chosen