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1.
Asset allocation refers to _______.
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The mix of assets in the portfolio. By diversifying assets, return can be improved or risk can be reduced.
2.
ETF investors might want to have some alternative assets such as commodities and currencies in their portfolios because those assets are less correlated to broader stock market returns.
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True. They tend to be less correlated to broader stock market returns over long periods of time. This can provide some needed diversification to ETF investors.
3.
ETFs are ideal as core portfolio holdings because _______.
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All of the above. ETFs are generally low cost and some cover broad index funds, which are ideal characteristics for core portfolio holdings. They are also available in a variety of different asset classes.
4.
Generally, an investor with a shorter investment horizon should have _______.
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A more conservative portfolio, invested in lower risk assets. An investor with a shorter time horizon will want to invest conservatively, in lower risk assets.
5.
An ETF satellite holding typically _______.
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All of the above. Satellite holdings are shorter term and attempt to exploit an investment idea. The variety of ETFs available in niche areas makes them ideal for use as satellite investments.