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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.
Which of the following is a question to answer for the Monitoring Procedures section of your investment policy statement?
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How will I determine how well my overall portfolio is doing? This question will help you monitor your investments.
3.
The investment objectives portion of your investment policy statement covers what you're trying to achieve with your portfolio.
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True. It's all about goals.
4.
Which of the following items would be part of the investment selection criteria of your investment policy statement?
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Minimum tax-efficiency ratio. The investment selection criteria are quantitative in nature.
5.
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.