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1.
What investment theory says that you can limit your volatility by spreading your risk among different types of investments?
Modern Portfolio Theory.
2.
In a nutshell, the efficient market theory says _______.
You can't beat the market. The theory says that stock prices are as correct as they possibly can be, and therefore you cannot beat the market. It has its detractors, however.
3.
If you find yourself following the crowd in your investment choices, you are doing what kind of practice?
Behavioral finance. Behavioral finance covers a number of psychological practices that tend to be at odds with the mathematical approach of various investing theories.
4.
What is the gist of the bucketing approach to retirement allocation?
You segment your portfolio based on when you expect to need your money. Segmentation is done in order to fund several years of retirement.
5.
What is a total-return approach in which a retiree segments a portfolio based on when the retiree expects to need the money?
