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Test Your Knowledge of Financial “Bases”


orking with a trusted financial professional is one of the best ways to help improve your overall financial situation, but it’s not the only thing you can do to make it around the diamond. Educating yourself about personal finance concepts can help you better understand your advisor’s recommendations, as


well as result in more productive and potentially more prosperous financial planning discussions. Take this brief quiz to see if your knowledge is little league level, or if you can swing for the fences in the majors!


QUESTIONS


1. How much should you set aside in liquid, low-risk savings in case of


emergencies? a. One to three months’ worth of expenses b. Tree to six months’ worth of expenses c. Six to twelve months’ worth of expenses d. It depends


2. Diversification can eliminate risk


from your portfolio. a. True b. False


3. Which of the following is a key


benefit of a 401(k) plan? a. You can withdraw money at any time for needs such as the purchase of a new car.


b. Te plan allows you to avoid paying taxes on a portion of your compensation.


c. You may be eligible for an employer match, which is like earning a guaranteed return on your investment dollars.


d. None of the above. 4. All of the money you have in a bank


account is protected and guaranteed. a. True b. False


5. Which of the following is typically the best way to pursue your long-


term goals? a.


b. c.


Investing as conservatively as possible to minimize the chance of loss.


Investing equal amounts in stocks, bonds, and cash investments.


Investing 100% of your money in stocks. d. Not enough information to decide.


10 • Ambassador Advisors


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