Choose wisely. There is only one correct answer to each question.
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1.
The best way to put an investment's performance into context is to compare its returns to those of _______.
An appropriate benchmark. Compare the returns of your investments to the benchmark you chose.
2.
The Internet can send you alerts to tell you when there are big changes in your investment holdings.
True. Some financial Websites will send you such alerts if you sign up for them.
3.
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.
4.
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.
5.
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.
