Question 1
The risk-return relationship means
◦ the lower the risk, the higher the return.
◦ the higher the risk, the lower the return.
◦ the higher the risk, the higher the return.
◦ risk and return have little or no correlation.
Question 2
Money you set aside for a "rainy day fund" should be invested in ________, while money you are saving for retirement in 20 years should be invested in ________.
◦ mutual funds; bond funds
◦ money market funds; growth oriented stock mutual funds
◦ three year bank CD's; 20 year bank CD's
◦ preferred stock; common stock