Chartered Investment Manager (CIM) Practice Exam · Question
Which of the following best describes the primary objective of a 'strategic asset allocation' approach?
Strategic asset allocation involves setting long-term target asset class weights that reflect the investor's permanent objectives and constraints, such as risk
Start free practice for Chartered Investment Manager (CIM) Practice Exam
399 questions · no signup required · 40 free questions per day
Question: Which of the following best describes the primary objective of a 'strategic asset allocation' approach?
Answer options: ✅ To establish a long-term target asset mix based on an investor's objectives and risk tolerance.
- To make short-term adjustments to the asset mix in anticipation of market movements.
- To continuously rebalance portfolios to their original weights regardless of market conditions.
- To invest primarily in assets with high liquidity to facilitate frequent trading.
Correct answer: To establish a long-term target asset mix based on an investor's objectives and risk tolerance.
Explanation: Strategic asset allocation involves setting long-term target asset class weights that reflect the investor's permanent objectives and constraints, such as risk tolerance and return requirements.
Start free practice for Chartered Investment Manager (CIM) Practice Exam
399 questions · no signup required · 40 free questions per day
More about Chartered Investment Manager (CIM) Practice Exam
Related Questions
- Strategic asset allocation is:
- Modern Portfolio Theory introduced by:
- A client approaches you, a CIM-credentialed portfolio manager, wanting to understand the true cost of their mu
- Duration measures bond sensitivity to:
- Which of the following is an example of an alternative investment?
- An investment advisor's foremost duty to a client is to act in their best interest, placing the client's inter
More for Chartered Investment Manager (CIM) Practice Exam candidates
Ready to practice?
Free, no signup required. Build a wrong-question list as you go.
Start Free Chartered Investment Manager (CIM) Practice Exam Practice →Related courses
Other Canadian certifications candidates often prepare for alongside this one.