Choose wisely. There is only one correct answer to each question.
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1.
What type of bond would be the least volatile part of an aggressive portfolio?
Short-term bond. Short-term bonds are the least volatile of these options.
2.
Why may tilting your portfolio toward growth stocks theoretically alter its performance?
Because companies that are growing at a decent rate should outperform companies growing at a slower rate. Over time, a stock's price follows its earnings. As a result, companies that are growing at a decent rate should outperform those companies growing at a slower rate.
3.
Emerging-market stocks live up to their promise.
False. Although these stocks can be considered aggressive, often the emerging nations behind them have a lot of challenges to overcome. It remains to be seen just how promising they are.
4.
How aggressive 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 aggressive your portfolio is.
5.
Tilting your portfolio toward growth stocks theoretically enhances its performance.
True. This is so because growth stocks generally outperform non-growth stocks.
