Choose wisely. There is only one correct answer to each question.
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1.
In the Morningstar Style Box, which square would provide diversification to a large-growth fund?
A small-value fund. The corners are the areas that show where diversification would be. A small-value fund would therefore offer the most of that.
2.
If you own one fund from a boutique fund family, how many other funds should you own from that same family if you value diversification?
None. If you own more than one fund run by a boutique or specialist shop, chances are you own two (or more) of the same thing. Boutiques focus on what they do best, and as a result owning more than one of their funds often results in overlap.
3.
If you have a lot of diversity among individual stocks, what does that say about your diversity in particular sectors of the market?
It can't be determined. A diverse collection of stocks might actually share exposure to certain sectors. Tech is a good example of such a sector.
4.
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.
5.
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.
