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Portfolios 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.
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.
3.
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.
4.
The investment philosophy section of your investment policy statement tells you _______.
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What is important to you as an investor. This section tends to be subjective.
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.