AAII

1. What might large cash holdings in a fund signify?

The fund is underperforming

The managers are timing the market

The fund is making large redemptions

2. Why should you look at a list of the fund’s holdings?

To see if the fund is holding too many investments

To decide if the fund will outperform the market

To make sure the fund is invested in the type of securities you think it is

3. Standard deviation measures:

The total absolute volatility of the fund's return

The fund’s relative volatility compared to the market

The fund’s return relative to its risk

4. What additional information should you gather about international funds?

Where the fund’s corporate office is located

A breakdown of holdings by country and region

A breakdown of languages spoken at firms

5. A bond fund’s return is its

Yield

Price change

Yield plus price change

6. The duration of a bond fund measures:

The credit risk of the fund

The fund’s yield

The fund’s exposure to interest rate risk

QUIZ: Choosing the Best Fund for You