Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
The large differences in size among funds in the "small-cap" section of the Morningstar style box mean that _______.
Some will outperform others at times. Some funds will perform better than others during market conditions that favor the companies they hold.
2.
In the language of sector investing, the stock 'super-sectors' are divided into _______.
Cyclical, sensitive, and defensive. Each of these super-sectors breaks down into smaller ones.
3.
A fund's turnover rate tells you what?
How frequently the manager trades the portfolio. Buy-and-hold managers will have lower turnover rates than managers who buy and sell stocks on short-term factors.
4.
A fund's number of holdings tells you what?
How much per-issue risk a fund is taking on. Funds with fewer holdings are more vulnerable to troubles in one or two stocks than funds with more holdings are. Sector weightings reveal a fund's sector risk, while P/E and P/B ratios relative to a fund's peers reflect price risk.
5.
Price/earnings multiples tell you what?
How much price risk a fund is taking on. The greater a fund's price/earnings multiple, the greater its price risk.
