Choose wisely. There is only one correct answer to each question.
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1.
The Morningstar Style Box uses _______.
A fund's current portfolio. In order to gauge overlap, the box must use the most recent holdings.
2.
If you own one fund run by Manager A, how many other funds of his or hers should you own if you value diversification?
None. Managers generally have ingrained investment habits that they apply to every pool of money they run; they'll rarely use a growth strategy on one portfolio and a value strategy on another.
3.
If you own a lot of growth funds, chances are you're overweight in what sector of the market?
Technology. Current growth managers lean toward tech stocks.
4.
To avoid overlap, how many large-blend funds should you own if you already have a large-value and a large-growth fund?
Maybe none. Because the large-cap universe is small, there's little need to own a large-blend fund if you already have funds from the large-value and large-growth categories.
5.
An online tool can help you find overlap in your portfolio.
True. Firms such as Morningstar have special tools on their Websites to help you analyze your portfolio for overlap.
