Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
Which of the following is true regarding the relationship between passive and active asset allocation?
Active allocation is generally more expensive. Active allocation can be considerably more expensive because each reallocation can result in the liquidation of shares of one or more securities in exchange for shares of new securities.
2.
Asset allocation is the practice of dividing investment assets among different markets.
True. Asset allocation is the practice of dividing investment assets among different markets to achieve diversification and a balance between risk and return consistent with an investor's objective.
3.
A 12b-1 fee is used to offset reduced sales charges and to cover some of the administrative costs of a mutual fund.
True. A 12b-1 fee, which is assessed annually, is based on the fund's total net asset value, and is used to offset reduced sales charges and to cover some of the administrative costs of the fund.
4.
The three general levels of risk are conservative, moderate, and growth.
True. The three general levels of risk are conservative, moderate, and growth (a close relative of which is aggressive-growth).
5.
Investors using the multifund approach to asset allocation are interested in _______.
Taking advantage of particular fund managers or families. Investors are interested in taking advantage of the management expertise of particular fund managers to duplicate specific historical performances.