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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