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1.
Morningstar Risk measures how volatile funds are _______.
Relative to others in its category. Morningstar compares the risk of each fund with other funds in the same Morningstar category.
2.
Morningstar Risk describes the variation in a fund's:
Monthly returns. Morningstar Risk describes the variation in a fund's month-to-month returns, with an emphasis on downward variation.
3.
Morningstar's bear-market rankings show you know how a fund performed during all time periods.
True. The bear-market rankings show you know how a fund performed only during certain time periods.
4.
What's the best way to use bear-market rankings?
To find funds that tend to do relatively well when the market falls. If you seek funds that offer a narrow range of returns, examine standard deviation. If you want funds that rarely underperform, look for low Morningstar Risk scores.
5.
Morningstar Risk is based on the idea that investors are more concerned about _______.
The chance of losing money. Morningstar Risk is based on the idea that investors are more concerned about a probable loss than an unexpectedly high gain.
