Choose wisely. There is only one correct answer to each question.
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1.
Essential funds for a simple portfolio will be those that focus on large- and small-cap stocks.
False. Your asset allocation ultimately drives what types of funds you should invest in. Large- and small-cap stocks might be inappropriate for you.
2.
Which type of bond fund would make the ideal choice for a simple portfolio?
An intermediate-term, high-quality bond fund. Those who want to keep bond investing simple might stick with funds that invest in highly rated intermediate-term credits. Longer-term and lower-quality choices take on too much risk and therefore complicate matters.
3.
Which types of funds are essential for a simple portfolio will depend on your asset allocation.
True. Your asset allocation drives what types of funds you invest in.
4.
Which types of funds are essential for a simple portfolio?
It depends on your asset allocation. Your asset allocation drives what types of funds you invest in.
5.
With mutual funds, simplicity seekers should perhaps think in terms of _______.
Core holdings only. For many investors, core holdings are all they ever need.
