Suppose you are 28 and married. You and your spouse file for income taxes jointly. You are in the 25% tax bracket. You are considering a few personal investment issues.

Suppose you are 28 and married. You and your spouse file for income taxes jointly. You are in the 25% tax bracket. You are considering a few personal investment issues.

Suppose you believe that the security market is at efficient in the semi-strong form. You are considering buying some mutual fund shares in your investment accounts. Which of the following statements is correct? 

a. Actively managed funds are good choices because they may consistently beat the market, they are tax efficient and have lower expenses.

b. Actively managed funds are not good choices because they cannot consistentlybeat the market although they are tax efficient and have lower expenses.

c. Index funds are not good choices because they are not tax efficient, their management fees are higher although actively managed funds cannot consistently beat the market.

d. Index funds are good choices because they are tax efficient and have lower expenses and because actively managed funds cannot consistently beat the market.

Suppose you are 28 and married. You and your spouse file for income taxes jointly. You are in the 25% tax bracket. You are considering a few personal investment issues.

Suppose you believe the security market is efficient in the weak form but not efficient in the semi-strong form. Based on your belief, you would consider all of the following strategies EXCEPT ____.

a. Investing in an actively managed mutual fund specialized in following price trends of commodities (e.g., gold, copper, crude oil, wheat, etc.).

b. Investing in an actively managed mutual fund specialized in picking small-size stocks.

c. Investing in an actively managed mutual fund specialized in picking technologystocks.

d. Investing in an actively managed mutual fund specialized in picking speculative-grade bonds (or junk bonds).

Suppose you are 28 and married. You and your spouse file for income taxes jointly. You are in the 25% tax bracket. You are considering a few personal investment issues.

Suppose you expect a significant career or family change in three years, which requires substantial initial capital commitment (e.g., starting your own business, relocating abroad, buying a house, children going to college, etc.). Which of the following seems to be the most appropriate investment strategy?

a.Take a loan to buy an investment condo.

b.Use your savings to buy a small number of stocks that you believe to rise in price.

c.Use your savings to buy well-diversified stock mutual fund shares.

d.Use your savings to buy well-diversified bond mutual fund shares.