Choose wisely. There is only one correct answer to each question.
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1.
Why does your personal rate of return matter?
Because it helps you to evaluate how your portfolio and individual funds are performing. Knowing your portfolio's actual returns can help you determine whether you're on track to meet your investment goals and whether your funds are living up to your expectations.
2.
When calculating your personal returns on a spreadsheet or financial calculator, you must enter _______ for your contributions.
Negative numbers. The returns you're calculating are for the final worth of your portfolio, minus the money you started with and invested during the year.
3.
Where can you always find your personal rate of return for a fund?
Neither. Fund companies rarely include personal rates of return on documents. You'll have to calculate the number for yourself by using a financial calculator or spreadsheet program, or by entering your portfolio in an online portfolio manager.
4.
In order to calculate a fund's personal returns for a single year, you need all but which of the following?
None of the above; you need all of them. All of these are necessary when calculating a fund's personal returns for a single year.
5.
If your personal rate of return for a fund is much lower than the return reported by your fund company, you should probably take a look at _______.
When you've been buying and selling. Your timing probably accounts for the difference.
