Question

Siiri invests 10 % in real estate, 40 % in mutual funds, 25 % in government bonds, and 25 % in stocks. what do Siri’s investment demonstrate?

Answer 1

Answer: Asset allocation

Explanation:

Asset allocation refers to the strategy of investing in different types of assets and investment vehicles so that the risks would be balanced by the rewards to be earned so that the investor will benefit.

Asset allocation is usually based on the investor's investment goals and their risk appetite. Those who are more risk tolerant will usually invest more in stocks so Siiri here is most likely risk averse but based on the percentage that went into stocks, they might be more risk neutral.