37. John and Mary are retired and each has $1,000,000 in their I.R.A. Johns account is traditional while Marys is a Roth. Who is likely to be wealthier?

a) Mary

b) John

38. If you invest in an S&P500 index fund, your money is invested in the 500 companies in the index. The largest portion of your money is invested in:

a) the company with the smallest market cap

b) your money is spread equally among all 500 companies

c) the company with the largest market cap

39. When a fund has offered superior returns in the past (alpha is positive):

a) that fund is more likely to offer superior returns (positive gross alpha) in the future.

b) that fund is likely to offer average returns (gross alpha is zero) in the future

c) that fund is less likely to offer superior returns (positive gross alpha) in the future.

40. When the American economy virtually shut down in March 2020, our government decided that households needed cash to eat and pay their bills so a check was mailed to most households in April. The last thing these folks need is some self-righteous professor telling them that they should have an emergency fund to get them through 3 to 6 months of expenses. However, having 3 to 6 months of household expenses held in an emergency fund was recommended in this course.

a) Emergency funds were not mentioned in this course.

b) True