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

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1.
In the Morningstar style box, all the small-cap funds are the same size.
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False. The funds vary dramatically in market capitalization; therefore, you should examine the size of each.
2.
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.
3.
A fund's turnover rate is usually calculated _______.
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Once a year. As a rule, turnover rates are calculated yearly.
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.
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.