Question

6. Name at least five things Pete and Jessica need to look out for when making stock investments. Before making any stock​ investment, Pete and Jessica need​ to: ​

A. be prepared for losses and be wary of claims for easy profit or​ "hot tips", if they use an online account.
B. understand the concept of beta and how the beta of a stock tells how much and in what direction an individual stock price has moved relative to the market. High beta stocks have much more volatile price swings than low beta stocks. C. understand the types and potential impacts of the various risks they would be exposed to.
D. be aware of psychological impacts on investment decisions.
E. be aware of​ misrepresentation, telephone sales​ pitches, or recommendations based on​ "inside information" or other tips.
F. be prepared for the risks involved with broker​ "churning" when they employ an investment strategy and asset allocation model that meets or exceeds their risk beta.
G. employ an appropriate investment strategy and asset allocaion model that meets their risk tolerance.
H. be aware of​ "hot tips" and​ "insider information" that will help them choose the best stocks.
I. be aware of excessive transactions undertaken by broker​ "churning", if they use a broker.

Answer 1

1. be prepared for losses and be wary of claims for easy profit or​ "hot tips", if they use an online account.

2.employ an appropriate investment strategy and asset allocaion model that meets their risk tolerance.

3.be aware of psychological impacts on investment decisions

4.understand the types and potential impacts of the various risks they would be exposed to.

5.be aware of​ misrepresentation, telephone sales​ pitches, or recommendations based on​ "inside information" or other tips.