Quizmaster, Doug Hutchinson, has come up with another great quiz for us regarding the cash we keep in our portfolios and its effect on performance. Test your investment knowledge of how your money is invested and what makes the most sense for your situation. Good luck! [+] Read More

We are fortunate to have a brilliant CFA here at WrapManager, Doug Hutchinson. At our weekly staff meetings, he has been testing our abilities with financial quizzes. This month, he demonstrates how we make choices given our tolerance for risk. Risk Aversion Consider and choose A or B for each of the following scenarios: 1. You are asked to choose between getting $800 for sure or an 80% chance of getting $1,000 A.) Getting $800 B.) 80% chance of getting $1,000 (and a 20% chance of getting nothing) 2. You are asked to choose between losing $800 for sure or an 80% chance of losing $1,000 [+] Read More

We are fortunate to have a brilliant CFA here at WrapManager, Doug Hutchinson. At our weekly staff meetings, he has been testing our abilities with financial quizzes. These are great tests of your investment knowledge. Good luck! Scenario: ETF A has an expense ratio of 0.05% ETF B has an expense ratio of 0.20% Assume ETF A and ETF B track the same index and both track that index perfectly. So if the index returns 5%, then ETF A will return 4.95% (including the expense ratio) and ETF B will return 4.80% (including the expense ratio). Assume the index returns 5% a year for each of the next 3 years. Manager A invests $10,000 in ETF A at the start of Year 1 Manager B invests $10,000 in ETF B at the start of Year 1 What is the difference in wealth accumulation (in dollar terms) between Manager A and Manager B after 1 year? After 3 years? [+] Read More