Quiz: Laddering

Reinvesting your earnings helps your savings grow faster. Do you know how laddering gets you to the top faster?

Take this quick quiz to find out.

What role does compound interest play in the laddering strategy described in the article?

a) It is not relevant to laddering.
b) Compound interest is reinvested to earn more interest over time.
c) It only affects short-term investments.
d) Compound interest leads to a decrease in overall returns.

How does laddering work in the context of the provided example?

a) Investing a lump sum in a single long-term commitment.
b) Systematically investing in stocks every quarter.
c) Spreading investments across different maturities at regular intervals.
d) Reinvesting the entire portfolio annually.

Why is laddering considered suitable for RRSPs (Registered Retirement Savings Plans)?

a) It provides short-term liquidity.
b) It aligns with aggressive investment goals.
c) It works best with fixed-income investments like bonds and GICs.
d) It allows frequent withdrawals without tax consequences.

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