Choose wisely. There is only one correct answer to each question.
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1.
Why are short-term bonds a good fit for a conservative portfolio?
Because they have short maturities, they are less volatile. Thus, short-term bonds are often advised for anyone wanting to make his or her portfolio more conservative.
2.
How aggressive you should be with your investments depends on several things. Which of the following is not one of them?
None of the above. All the factors listed are relevant.
3.
Stocks trading at prices that are in line with their earnings, sales, or cash flows would help keep a portfolio conservative.
True. Stocks of this nature tend to have relatively low price risk, which helps dampen a portfolio's volatility.
4.
Which of the following companies would NOT lessen the volatility of your portfolio?
Very small companies. Very small companies tend to grow quickly, and that makes them volatile -- too volatile for a conservative portfolio.
5.
The stock of which foreign company would be the least volatile?
A large manufacturer. As a rule, the large companies would be the least volatile.
