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1.
A fund's number of holdings tells you how much sector risk a fund is taking on.
False. The number of holdings tells you how much per-issue risk a fund is taking on.
2.
A fund's turnover rate is usually calculated _______.
Once a year. As a rule, turnover rates are calculated yearly.
3.
Sector weightings in a fund tell you what?
What industries your manager favors. If a fund has 50% of its portfolio in the technology sector, for example, half of its performance will be determined by the strength or weakness of that one sector.
4.
Price risk is the risk that securities will cost too much.
False. Price risk is the risk that securities will be overvalued by the market.
5.
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.
