Questions from General Investment

Q: Explain the role of portfolio revision in the process of managing a

Explain the role of portfolio revision in the process of managing a portfolio.

Q: What role do an investor’s portfolio objectives play in constructing a portfolio

What role do an investor’s portfolio objectives play in constructing a portfolio?

Q: Explain the role that formula plans can play in the timing of

Explain the role that formula plans can play in the timing of security transactions. Describe the logic underlying the use of these plans.

Q: Briefly describe each of the following plans and differentiate among them.

Briefly describe each of the following plans and differentiate among them. a. Dollar-cost averaging b. Constant-dollar plan c. Constant-ratio plan d. Variable-ratio plan

Q: Describe how a limit order can be used when securities are bought

Describe how a limit order can be used when securities are bought or sold. How can a stop-loss order be used to reduce losses? To protect profit?

Q: Give two reasons why an investor might want to maintain funds in

Give two reasons why an investor might want to maintain funds in a low-risk, highly liquid investment.

Q: Describe the two items an investor should consider before reaching a decision

Describe the two items an investor should consider before reaching a decision to sell an investment.

Q: What is asset allocation? How does it differ from diversification?

What is asset allocation? How does it differ from diversification? What role does asset allocation play in constructing an investment portfolio?

Q: Briefly describe the basic approaches to asset allocation: (a)

Briefly describe the basic approaches to asset allocation: (a) fixed weightings, (b) flexible weightings, and (c) tactical asset allocation.

Q: What role could an asset allocation fund play? What makes an

What role could an asset allocation fund play? What makes an asset allocation scheme effective?