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1.
In investing, GARP stands for _______.
Growth at a reasonable price. GARP stands for growth at a reasonable price--a common investment strategy that looks for both growth and value qualities.
2.
A fund manager following an earnings-momentum style of stock-picking would be most likely to sell which stock?
The stock of a company that has reported lower-than-expected quarterly earnings. If a firm has announced bad news--lower-than-expected earnings, for example--its stock price is likely to fall in the short term. Momentum investors usually try to sell at that point. They tend to hold stocks that have posted strong earnings.
3.
GARP (growth at a reasonable price) funds usually have turnover rates that are _______ those of pure-growth funds.
Lower than.
4.
GARP (growth at a reasonable price) is a strategy that looks for qualities of _______.
Both growth and value. It is a hybrid approach.
5.
In investing, momentum strategies typically produce funds with _______.
High portfolio turnover and high risk. Because momentum managers engage in frequent stock trading, momentum funds usually have high annual turnover rates. This trading and turnover is bad for tax efficiency. Momentum-type stocks also generally carry a lot of price risk.
