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Checkpoint quiz · Investing & Markets

Investing & Markets: Checkpoint 3

Covers retirement accounts, market volatility, and investment fees.

Five questions on retirement accounts, staying calm through volatility, and why fees matter more than they seem to.

Question 1 of 5 An employer match on a 401(k) is often described as valuable because:

It's the same as a bank savings rate It's effectively free money added on top of your own contribution It only applies after retirement It replaces the need for Social Security

Question 2 of 5 A 'bear market' refers to:

Any single bad trading day A sustained decline of 20% or more from a recent high A market that only trades bonds A market closed for a holiday

Question 3 of 5 'Panic selling' during a downturn is risky mainly because:

It's illegal in most markets It locks in a loss that might otherwise have recovered given time It always triggers a tax penalty It's impossible to do with an index fund

Question 4 of 5 A fund charging a 1% annual expense ratio, compared to one charging 0.1%, will:

Always guarantee a higher return Need to outperform by that same 1% each year just to produce an equal result Have identical long-term returns regardless of fees Only affect returns in the first year

Question 5 of 5 Why is checking a fund's expense ratio before investing considered high-value advice?

It's the only factor that matters Small fee differences compound into large costs over decades Expense ratios change the fund's risk level It's required by law to check before every trade

← Back to Understanding Fees: Why 1% Matters More Than You Think Next lesson → Common Investing Mistakes Beginners Make

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