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Portfolios 108: Creating Your Investment Policy Statement

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1.
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.
2.
The Monitoring Procedures portion of your investment policy statement details how you will keep tabs on your investments.
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True. This is the section that covers how you will keep things in line with your executive summary.
3.
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.
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.
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.