Choose wisely. There is only one correct answer to each question.
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1.
To dampen volatility in your foreign investments, focus on small international companies in developed markets.
False. You should focus on large companies, not small ones.
2.
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.
3.
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.
4.
Why should tilting your portfolio toward larger-company stocks and away from smaller-company stocks curtail its volatility?
Because larger companies growing at a slower rate should be less volatile than smaller companies growing at a faster rate. The faster the growth and the smaller the company, the more volatile the stock. If curtailing volatility is your goal, focus the U.S. stock portion of your portfolio on the very largest companies.
5.
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.
