Choose wisely. There is only one correct answer to each question.
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1.
According to many financial professionals, what contributes the most to your portfolio's return and volatility?
Your blend of investments. In other words, your asset allocation is what matters more than anything else.
2.
Which of the following groups of stocks provides the most opportunity for growth?
Small-company stocks. As a general rule, smaller companies are growing faster than medium or large companies.
3.
What type of bond would be the most volatile part of an aggressive portfolio?
High-yield bond. High-yield bonds are the most volatile of these options.
4.
To alter your foreign investments, consider _______.
Smaller companies. As in the United States, foreign mid- and small-company stocks theoretically have a growth edge over their larger counterparts. Emerging-markets stocks are also an option for aggressive investors.
5.
What's among the most significant move you can make to alter your long-term returns and volatility?
Reducing your bond and cash investments and increasing your position in stocks. Your blend of cash, stocks, and bonds likely contributes more to your portfolio's return and volatility than what investment styles you practice, what sectors you have exposure to, and what individual securities you choose. The more of your portfolio you have in stocks and the less you have in bonds and cash, the more intense your portfolio's performance can be.
