Choose wisely. There is only one correct answer to each question.
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1.
To tone down your foreign investments, consider _______.
Large companies domiciled in developed markets. The stocks of larger foreign companies may not have the same return potential as the stocks of smaller companies or companies domiciled in emerging markets, but they don't have the same volatility, either.
2.
How conservative you should be with your investments depends on what?
Your investment goal, your investment horizon, and your ability to handle volatility. Your goal, time horizon, and volatility tolerance should all help determine how conservative your portfolio is.
3.
Which type of bond is going to be the least volatile?
Short-term bond. Because the maturity dates of short-term bonds are nearer than those of longer-term bonds, short-term bonds tend to be less volatile. They often yield less, as well. Finally, they usually gain less than longer-term bonds when interest rates fall, but lose less when rates rise.
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.
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.
