AAII

1. A manager should be able to sum up the philosophy of the fund in a few simple words.

True

False

2. Why should you try to find out what universe of stocks the manager is focusing on?

It’s not always obvious from the fund’s investment philosophy

It helps you identify the index benchmark to compare the fund’s performance against

Both of the above

3. How do managers use conditioning screens in their stock-picking approaches?

To know when to sell stocks out of the portfolio

To winnow down a list of potential stocks

To keep cash in the fund to a minimum

4. Fund managers who use market timing add value for the investor.

True

False

5. In general, studies show that most technical tools are ineffective, except for what?

Relative strength

Moving average

Advance/decline line

6. What is the reason most managers sell a stock?

The stock’s price has risen

The stock’s price has dropped

The stock no longer meets their investment criteria

QUIZ: Choosing the Best Fund for You