Investing 101

Lesson 4: Practical Guide for Investors

Lesson 4 Optional Reading Assignment

Time Estimate 60 minutes

Resource From the required textbook, A Random Walk Down Wall Street by Burton Malkiel, read:
Part Four: "Practical Guide for Random Walkers," pages 317-456.

Objectives
In this reading assignment, you'll move from the theoretical to the practical. You will also receive pointers for putting what you've learned into practice.

Key Ideas from Reading Assignment

• Learn the importance of asset allocation.
• Develop skills for determining your portfolio's return.
• Understand the basics of life cycle investing.

Study Questions
Based on the reading assignment, answer the following questions. You do not need to hand in your responses for grading. These review questions are for self-study purposes only.

1. Complete the 10 exercises in the book for evaluating your financial position.
2. Practice the formulas given to determine the value of stocks and bonds.
3. Review the alternative methods of investing.
4. How will you put the theories and practical information learned in this course into building your own portfolio?
5. Is there one particular lesson you have learned that you found to be the most valuable? If so, why?

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