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1.
Which would likely be most volatile?
Choose wisely. There is only one correct answer.
A Latin America fund. A Latin America fund is both a regional and emerging-markets fund at the same time, and it would therefore be the most volatile of the group.
2.
To reduce the possibility of getting uneven returns from an international fund, _______.
Choose wisely. There is only one correct answer.
Find funds that own stocks from a wide variety of markets. Diversifying will, as a general rule, dampen the danger of uneven returns.
3.
Why own an international fund?
Choose wisely. There is only one correct answer.
Both of the above. Many international funds do well when U.S. funds aren't doing quite as well. As a result, they offer both good return potential and diversification.
4.
To choose a good international fund, _______.
Choose wisely. There is only one correct answer.
Understand how the fund invests. While you should certainly examine a fund's rating and its past returns, you must also understand how the fund invests--the sort of companies it owns and the countries they're from.
5.
Which of the following is not true about emerging-markets stocks?
Choose wisely. There is only one correct answer.
They are low risk. Emerging-markets stocks usually behave unlike U.S. stocks and thus can make great diversifiers. They also have the potential to post higher returns. But they're exceptionally high risk.