Question

Asset allocation refers to ________. A. the allocation of the investment portfolio across broad asset classes B. the analysis of the value of securities C. the choice of specific assets within each asset class D. none of the options

Answer 1

Answer:

The answer is A. the allocation of the investment portfolio across broad asset classes

Explanation:

Asset allocation is related with the diversification of the investment portfolio. Investments can be allocated among several assets such as Stocks, Bonds, precious metals, commodities and real estate.

The allocation of assets depends on the house of the investor and depending on the way they are allocated and diversified, the risk.may be low or high.

Answer 2

Answer:

. A. the allocation of the investment portfolio across broad asset classes

Explanation:

Asset allocation is a strategy where an investor spreads his investments in different classes of assets. The purpose of asset allocation is the minimize risks through diversification. An individual asset allocation strategy is guided by their risk tolerance, personal goals, and investment horizon.

The three classes of assets where investors can place their investments are fixed incomes, equities, and cash and cash equivalents. Financial advisors encourage asset allocation to shield against deterioration of investments in certain classes.