Choose wisely. There is only one correct answer to each question.
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1.
If a mutual fund no longer meets one of your investment criteria, should you sell it?
Maybe, maybe not. It becomes a more important issue once it no longer meets most of your criteria.
2.
What can happen if you ignore changes that occur in your portfolio?
Both of the above. Ignore changes in your portfolio and you may end up with a portfolio that's very different from the one you originally put together.
3.
What should you do if your portfolio's returns fall short of your expected performance over a short period of time?
Don't panic, but do find out why your portfolio isn't meeting expectations--especially if your portfolio is suffering losses that are beyond your acceptable range. Your portfolio should average out to your expected return figure over time, not return that exact amount each and every year. But you should find out what's driving your portfolio's performance. And if your portfolio is actually losing more money than you thought it could, you may be taking on more risk than you think.
4.
Which of the following would be valuable to do before you start monitoring your investment portfolio?
Both of the above. Both of these are wise things to do. Though you can develop your monitoring procedures on your own, creating an investment policy statement would accomplish that as well as additional objectives.
5.
What is the danger in letting the strongest performers of your portfolio stay in there and continue performing, as opposed to regular rebalancing?
It increases the overall risk level, which can magnify losses during a downturn. And that means you might not meet the goals for which you are investing in the first place.
