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Portfolio 108: Creating Your Investment Policy Statement

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1.
What benchmark is most appropriate for a portfolio that is 50% invested in U.S. large-company stocks, 25% in bonds, and 25% in foreign stocks?
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A customized benchmark that combines U.S. large-company, bond, and foreign-stock indexes. Choose benchmarks for your portfolio that reflect the makeup of your portfolio.
2.
As regards your investment policy statement, investment selection criteria tend to be _______.
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Quantitative. These criteria are a means of quantifying your investment philosophy.
3.
The investment objectives portion of your investment policy statement covers _______.
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What you're trying to achieve with your portfolio and in what time frame. It's all about goals.
4.
Which of the following is a question to answer for the investment philosophy section of your investment policy statement?
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What's my philosophy about risk? Investment philosophy questions tell you what is important to you as an investor.
5.
The Monitoring Procedures portion of your investment policy statement details _______.
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How you will keep tabs on your investments. This the section in which you keep your document accurate and current.