PORTFOLIO

Portfolio management is the art and science of selecting and overseeing a group of

investments that meet the long-term financial objectives and risk tolerance of a client, a

company, or an institution.

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• FALSE

Active portfolio management, also referred to as index fund management, aims to

duplicate the return of a particular market index or benchmark.

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• FALSE

Active management involves attempting to beat the performance of an index by actively

buying and selling individual stocks and other assets.

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• FALSE

Diversification involves spreading the risk and reward of individual securities within an

asset class, or between asset classes.

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• FALSE

Rebalancing is used to return a portfolio to its original target allocation at regular intervals,

usually annually.

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• FALSE

Investment fraud happens when people try to trick you into investing money.

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• FALSE

Passive managers may use any of a wide range of quantitative or

qualitative models to aid in their evaluations of potential investments.

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The adviser still has a fiduciary

responsibility to act in their client's best interest when managing their portfolio.

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• FALSE

The key to effective portfolio management is the long-term mix of assets.

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• FALSE

A potentially material aspect of portfolio management relates to how your portfolio is

shaped to minimize taxes in the long-term.

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• FALSE