Money Talk Quiz, August 2021

As you read the articles on the Money Talk page and follow the weekly Money Talk Podcast, you may hear your own voice as a schoolchild ask, “Is there going to be a quiz on this?” The answer is, “Yes.” It’s another way for you to prove that you’re paying attention. […]

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Through articles on the Money Talk page and discussions during the weekly Money Talk Podcast, Landaas & Company advisors offer insights into the ever-changing financial markets. They help long-term investors make sense of what is going on and what it means to their portfolios. To see if you’re paying attention, try to provide the context for a sample of what advisors have talked about recently.

1.

“It looks to me that the street is digesting that growth may have peaked out this last month or so. And I think that’s good news because what you really want is growth that’s sustainable, that it’s reliable, that it’s capable of growing gradually. What you don’t want is an economy on fire.”

In suggesting that market mentality might have shifted from fears of inflation, Bob Landaas pointed to an indicator he called “the canary in the coal mine for inflation.” Which indicator was Bob referring to on the July 23 Money Talk Podcast? (Choose one.)

  1. Dow Jones Industrial Average
  2. 10-year Treasury yield
  3. Chicago Board Options Exchange Volatility Index (VIX)
  4. University of Michigan Consumer Sentiment Index

(See correct answer below.)
—

2.

“You’re seeing this combination of cash and very little in the way of safe investment returns equating to excessive risk taking. I think it’s something that people really have to be disciplined to avoid.”

On the July 9 Money Talk Podcast, Dave Sandstrom warned about investors overreaching for yield because of persistent low interest rates. Which vehicles did he NOT mention among his concerns? (Choose one.)

  1. Unicorns
  2. ETFs (exchange-traded funds)
  3. Cryptocurrencies
  4. Chinese VIEs (variable-interest entities)

(See correct answer below.)
—

3.

“Even if you’re just being a passive investor, or just holding an S&P 500 proxy, you’re getting a changing basket of stocks year to year, quarter to quarter, as that S&P 500 rebalances.”

Chris Evers made this point on the July 16 Money Talk Podcast, noting the fluctuating components of the broad stock index. Which company had the S&P 500 just added to its index? (Choose one.)

  1. Pfizer Inc.
  2. Johnson & Johnson
  3. AstraZeneca
  4. Moderna Inc.

(See correct answer below.)
—

4.

“We’re not just talking about more money in the system. We’re talking about more money that’s chasing fewer public opportunities. So, as you look at the list of publicly traded stocks, it’s no wonder that if you pour the money into markets, but those markets don’t expand in terms of the availability of securities, you make the existing securities worth a little bit more.”

Kyle Tetting and Brian Kilb talked about a gradual decline in the number of publicly traded companies. Kyle’s statement, from the June 25 Money Talk Podcast, referred to what fundamental principle? (Choose one.)

  1. Supply and demand
  2. Earnings and interest rates
  3. Buy low, sell high
  4. Don’t fight the Fed

(See correct answer below.)

Answers

1.

b. 10-year Treasury yield

Learn more
Talking Money: Inflation, by Adam Baley
Keeping balance in unnerving times, by Bob Landaas
Stocks offset fears of inflation over time, by Joel Dresang

2.

b. ETFs (Exchange-traded funds)

Learn more
Thinking about buying the latest new cryptocurrency or token? from Investor.gov
Disclosure considerations for China-based issuers, from U.S. Securities and Exchange Commission
Investment risk, explained, from the Financial Industry Regulatory Authority
Talking Money: Investing in ETFs, a Money Talk Video with Dave Sandstrom

3.

d. Moderna Inc.

Learn more
When Should I …consider passive index funds? by Mike Hoelzl
“Active vs. Passive Management” in Mutual funds, from the Financial Industry Regulatory Authority
Talking Money: Index funds, a Money Talk Video with Kyle Tetting
Correlation: How investment balance can shift, a Money Talk Video with Kyle Tetting

4.

a. Supply and demand

Previous Money Talk Quizzes
Money Talk Quiz, July 2021
Money Talk Quiz, June 2021
Money Talk Quiz, May 2021
Money Talk Quiz, April 2021
(initially posted July 29, 2021)

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