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To dampen volatility in your foreign investments, focus on small international companies in developed markets.

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True

False

False. You should focus on large companies, not small ones.

Why are short-term bonds a good fit for a conservative portfolio?

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Because they have short maturities, they are less volatile.

They gain a lot when interest rates rise.

They naturally have high yields.

All of the above

Because they have short maturities, they are less volatile. Thus, short-term bonds are often advised for anyone wanting to make his or her portfolio more conservative.

Short-term bonds are less volatile than intermediate-term bonds.

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True

False

True. This is due to their shorter maturities.

How aggressive you should be with your investments depends on several things. Which of the following is not one of them?

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Your investment goal

Your investment horizon

Your ability to handle volatility

None of the above

None of the above. All the factors listed are relevant.

Stocks trading at prices that are in line with their earnings, sales, or cash flows would help keep a portfolio conservative.

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True

False

True. Stocks of this nature tend to have relatively low price risk, which helps dampen a portfolio's volatility.

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