Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
GARP (growth at a reasonable price) funds usually have turnover rates that are _______ those of pure-growth funds.
Lower than.
2.
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.
3.
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.
4.
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.
5.
Moderate-growth stocks are likely to be found in which type of growth fund?
A fund that buys stocks featuring steady and consistent annual growth rates. A value fund or a fund that buys stocks without earnings may buy a moderate-growth stock. But a solid, well-run company that generally meets or slightly exceeds quarterly earnings estimates would probably most appeal to a manager looking for steady growth.
