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Funds 208: Examining a Stock Fund's Portfolio: Style Box Statistics

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1.
The large differences in size among funds in the "small-cap" section of the Morningstar style box mean that _______.
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Some will outperform others at times. Some funds will perform better than others during market conditions that favor the companies they hold.
2.
Sector weightings in a fund tell you how much price risk a fund is taking on.
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False. Sector weightings tell you the industries your manager favors.
3.
A fund's number of holdings tells you how much sector risk a fund is taking on.
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False. The number of holdings tells you how much per-issue risk a fund is taking on.
4.
Price risk is the risk that securities will cost too much.
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False. Price risk is the risk that securities will be overvalued by the market.
5.
A fund's turnover rate tells you how frequently the manager trades the portfolio.
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True. Buy-and-hold managers will have lower turnover rates than managers who buy and sell stocks on short-term factors.