You would like to invest some money so that you can use it as a down payment for a house. You assume that you will not be ready to purchase a house for several years, so you will not need to sell the investment or access the money quickly. In considering which type of investment to select, the factor that impacts your decision is:
A) your investment horizon.
B) asset allocation goals.
C) liquidity needs.
D) investment diversification.
E) your risk tolerance.
Question 2
Imagine you are superintendent for your local school system. One teacher in the high school, Mr. Hinkle, has been complaining that he earns much less than his counterparts in the building. Teachers in the building work the same hours and have the same number of students. According to equity theory, which of the following reasons could you give Mr. Hinkle that would likely cause him to accept the difference in pay?
A) Other teachers in the building have longer commutes to work.
B) Other teachers in the building have Master of Education degrees.
C) Other teachers in the building put in the same effort as Mr. Hinkle.
D) Other teachers in the building started teaching in the last year or two.
E) Other teachers in the building have students with higher grade point averages.
