Exercise
Answer the following questions.
1. Which of the following is least likely to be a reason that an individual invests in precious metals?
A. Their rates of return are less volatile than those of stocks and bonds.
B. They can often be used to diversify a traditional portfolio.
C. Their rates of return have a low correlation with most other types of investment.
D. A belief that though the supply of precious metals is limited, demand for precious metals will only increase as the world’s population grows.
2. True or false. An investor will pay annual taxes on precious metals.
3. True or false. Financial experts generally agree that precious metals are a benefit to a typical investment portfolio.
Answers
1. A. While their rates of return may be separated from market forces that drive and hinder other types of investment, they are more volatile