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Canadian Securities Course (CSC) Practice Exam · Question

A portfolio manager conducting 'asset allocation' is primarily focused on:

Asset allocation is the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash, to reflect a client's ris

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Question: A portfolio manager conducting 'asset allocation' is primarily focused on:

Answer options:

  • Selecting individual securities within specific asset classes. ✅ Diversifying investments across different asset classes based on risk tolerance and objectives.
  • Timing the market by buying low and selling high.
  • Minimizing transaction costs and fees for the client.

Correct answer: Diversifying investments across different asset classes based on risk tolerance and objectives.

Explanation: Asset allocation is the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash, to reflect a client's risk tolerance, investment goals, and time horizon.

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