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Which of the following means that a person will owe taxes only when they begin to take distributions from the account? a) tax preferred b) tax exempt c) tax deferred d) tax deductible

Which of the following refers to spreading investments across different types of assets to manage financial risk? a) optimization b) maximization c) diversification d) immunization

Which of the following offers no promise of what the money will be worth when a person retires? a) long-term investment plan b) defined contribution plan c) pension plan d) defined benefit plan

Sofia has an opportunity to invest $18,000 she inherited from her great aunt. She wants to know how long it would take to double her money. The average investment return over the past decade was 8% annual percentage yield (APY). Using the rule of 72, calculate how long it would take the $18,000 to double at a rate of 8% in interest.

a) 7 years

b) 9 years

c) 8 years

d) 6 years

Yang Bai is investing $10,000 and wants a portfolio that is 80% stocks and 20% bonds. She has decided to accomplish this using just 2 exchange-traded funds (ETFs): a stock ETF trading for $50 per share and a bond ETF trading for $100 for share. What should she do to meet her asset allocation goal?

a) purchase 160 shares of the stock etf and 10 shares of bond etf

b) purchase 80 shares of the stock etf and 20 shares of the bond etf

c) purchase 160 shares of the stock etf and 20 shares of the bonds etf

d) purchase 80 shares of the stock etf and 10 shares of bond etf

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