Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
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.
3.
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.
4.
Which type of bond is most like a stock?
Convertible bond. Convertible bonds can be, as their name suggests, converted into stocks. Because of this conversion feature, convertibles behave very much like stocks. They are generally less volatile than stocks, though, because they pay a fixed coupon (or yield).
5.
Tilting your portfolio toward growth stocks theoretically enhances its performance.
True. This is so because growth stocks generally outperform non-growth stocks.
