Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
What is a company's market capitalization?
A company's size based on the market value of its shares. A company's market capitalization is simply its size based on the market value of its shares. The market cap measure is not directly tied to a firm's earnings or sales.
2.
The Morningstar style box does not summarize which of the following?
How rapidly a fund manager buys and sells stocks. The style box provides a snapshot of the size and price of the stocks in a fund's portfolio. To get a feel for how rapidly a fund manager buys and sells stocks, check a fund's turnover rate.
3.
Which type of fund is likely to be the most volatile?
A small-cap growth fund. Funds that own expensive (growth) small companies are bound to be more volatile than those that own large, inexpensive (value) stocks or middle-of-the-road (blend) fare are.
4.
In gauging the value of a stock, examine its _______.
Price/book ratio. Both price/book and price/earnings ratios tell you how expensive a stock is based on some value--either the value of the company if it were sold and paid off its debts (P/B) or the value of a company based on its earnings (P/E). These factors are employed by Morningstar in measuring the "value" aspects of a stock for placement in the style box.
5.
According to the Morningstar style box, a blended fund will include elements of _______.
