Investing: Understanding How It Relates to You This assignment requires you to take the investment risk tolerance quiz. (http://pfp.missouri.edu/research_IRTA.html ) The link won't work within the assignment so you will need to take the quiz here in the introduction and make note of the resulting Score and Risk Tolerance Level. Write these down, and then proceed with the assignment. A word about risk tolerance: it is useful to understand how you view your tolerance to risk, however, a financial advisor wants to know your goals. If you have high money goals and want to invest will being risk averse get you there? Always remember too-it's your money don't feel pressured and do your research and due diligence. Reminder: All submissions will be scored on the quality of the contributions, as well as grammar, spelling and other technical aspects of the writing. Saving versus Investing ~ Getting started in investments is a process that begins with the understanding that we generally cannot accumulate wealth merely by saving from our earnings. There are several reasons why we should save. As discussed in Section Two, one reason is to develop an emergency fund. In this section of the course, we discover another reason to save. Q1: (a). In addition to the all-important emergency fund, what is another reason that we need savings? (b). Explain why saving is different than investing? Q2: Why Will You Invest? Once we understand the difference between saving and investing, we need to identify why we want to accumulate wealth (i.e. invest). What are reasons you would invest? What are reasons you would not invest? Remember stocks etc are not the only ways to invest. Real estate just one other example of investment. Your Tolerance for Risk ~ A crucial factor in developing an investment portfolio is the investor's tolerance for risk. After determining a risk tolerance, a portfolio can be developed to match financial instruments to the earnings goals of the investor. Complete the Investment Risk Tolerance Quiz, Rutgers, State University of New Jersey Cooperative Extension. here is the link (http://pfp.missouri.edu/research_IRTA.html ) Links to an external site. This quiz was developed by Dr. Ruth Lytton, Virginia Tech, and Dr. John Grable, Kansas State University. There are twenty questions in this quiz. Once you have answered them, submit your answers by clicking on the View Results button. (As a suggestion, you might want to ask other family members to complete the risk tolerance questions. It is important to know the risk tolerance level of family members when making investment decisions that will affect the entire family. This is not required for this assignment.) Q3: What were your Score and Risk Tolerance Level? 1. (a) Score? ----> (b) Risk Tolerance Level? ----> Please make a copy of your score and risk tolerance level in the event you are asked about it again in another assignment. Q4: Regarding the outcome of the investment risk tolerance quiz you just took (above), were you surprised by the assessment? Explain. Q5: Do you view yourself as being more or less willing to take investment risks when compared with the general U.S. population? Explain. Q6: How do you think your response to the question #5 above would change ten years from now? Why? Q7: Open-ended questions can also be helpful to discovering your willingness to accept risk. Respond in a well-written paragraph to the question, "How easily do you adapt to unfavorable financial changes in your life?" Q8: As a result of this assignment, what is your investment philosophy? Give at least two reasons to support the adoption of your philosophy. You will need to make a copy of this philosophy so that you can refer to it for the rest of the assignments in this section, as needed. Q9: After reading the following bulletin provided by the Federal Trade Commission regarding risks to investors, explain four steps you could take to avoid making bad investments. https://www.consumer.ftc.gov/
Purchase answer to see full attachment