Choose wisely. There is only one correct answer to each question.
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1.
According to many financial professionals, what contributes the most to your portfolio's return and volatility?
Your blend of investments. In other words, your asset allocation is what matters more than anything else.
2.
What type of bond would be the most volatile part of an aggressive portfolio?
High-yield bond. High-yield bonds are the most volatile of these options.
3.
Tilting your portfolio toward growth stocks theoretically enhances its performance.
True. This is so because growth stocks generally outperform non-growth stocks.
4.
Emerging-market stocks live up to their promise.
False. Although these stocks can be considered aggressive, often the emerging nations behind them have a lot of challenges to overcome. It remains to be seen just how promising they are.
5.
What's among the most significant move you can make to alter your long-term returns and volatility?
Reducing your bond and cash investments and increasing your position in stocks. Your blend of cash, stocks, and bonds likely contributes more to your portfolio's return and volatility than what investment styles you practice, what sectors you have exposure to, and what individual securities you choose. The more of your portfolio you have in stocks and the less you have in bonds and cash, the more intense your portfolio's performance can be.