Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Who decides exactly which securities a mutual fund owns?
The fund manager. The fund manager chooses investments for you. While the manager may practice a certain style that's common at the fund company he or she works for, the manager is the one choosing the individual securities.
2.
What is the best way to get a feel for how a mutual fund manager invests?
Check out its list of holdings and the sectors in which it invests. Consult the fund's portfolio and portfolio statistics to figure out how the manager invests. Compare a fund to a benchmark to see how competitive it has been.
3.
Two mutual funds with the same returns _______ have the same risk level.
May. Two funds with the same returns may or may not have the same risk level; it will depend on what they are investing in.
4.
How can you gauge how competitive a mutual fund's returns are?
Compare a fund's return with those of an appropriate benchmark. Analyzing returns in isolation does not provide a context in which to evaluate a fund's performance fairly. Instead, compare a fund to an index or a group of funds that buy the same types of securities.
5.
What is the most important thing to know about your mutual fund managers?
How they manage the fund. You can't control the whims of the market--or the whims of your fund manager. You can only control the types of funds you own and how they fit together.
