Choose wisely. There is only one correct answer to each question.
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1.
When a manager leaves a fund you own, what should you do?
It depends. If the fund was team managed or if the family has other skilled managers on staff, staying the course isn't a bad idea. If it's an index fund or a fund from a category with a modest range of returns, there's probably no reason to sell at all.
2.
Which type of fund is least affected by manager changes?
Index funds. Because index funds are passively managed--in other words, their managers aren't actively choosing which securities to buy or to sell--manager changes don't matter much.
3.
Funds following the single-manager system _______.
Use one lead manager and a group of traders and research analysts. Team-managed funds use two or more people who work together. At multiple-manager funds, a number of managers work independently of each other. Single-manager funds use one lead manager with others pitching in with research and trading.
4.
Funds following the management team system _______.
Use two or more people who work together to choose investments. Single-manager funds use one lead manager with others pitching in with research and trading. At multiple-manager funds, a number of managers work independently of each other. Team-managed funds use two or more people who work together.
5.
Funds following the multiple-manager system _______.
Use two or more people who work independently of each other to choose investments. Team-managed funds use two or more people who work together. Single-manager funds use one lead manager with others pitching in with research and trading. At multiple-manager funds, a number of managers work independently of each other.
