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9. Ruth is looking to purchase a diversified portfolio of stocks. She would like to have...

9. Ruth is looking to purchase a diversified portfolio of stocks. She would like to have the freedom to buy and sell shares in the portfolio throughout the day. Ruth should consider purchasing a(n)

I. Index mutual fund.

II. Exchange trade fund.

III. Fixed annuity fund.

a. I only

b. II only

c. I or II only

d. II or III only

10. Which type of investment product will tend to offer an investor the greatest potential for growth in principal if inflation is high?

a. Commodities

b. Cash

c. Stocks

d. Bonds

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Answer #1

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9. Ruth should invest exchange traded fund. i. e. option b)

Reason: ETF (exchange traded fund) consists of portfolio of Bluechip diversified stocks from multiple sectors. This stocks are highly liquid stock and traded on stock exchange. The price of ETF change with change in the price of stock. since ETF is listed on exchange, its buying and selling is very easy.

10. Commodities will offer greatest return, when inflation is high.

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