Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
In the Morningstar style box, all the small-cap funds are the same size.
False. The funds vary dramatically in market capitalization; therefore, you should examine the size of each.
2.
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.
3.
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.
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.
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.
