Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
The best way to put an investment's performance into context is to compare its returns to those of other investments in your portfolio.
False. The best way to do it is to compare its returns to an appropriate benchmark.
2.
If you've created an investment policy statement, you will have addressed which of these portfolio-monitoring issues?
All of the above. If you've created an investment policy statement, you will have addressed these questions and many others.
3.
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.
4.
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.
5.
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.
