CISI Investment Advice Practice Test
CISI IAD Portfolio Construction and Management
What is 'asset allocation' and why is it considered the most important investment decision?
Select your answer
A
Choosing specific securities within each asset class; it is important because security selection drives returns
B
The decision of how to divide a portfolio among different asset classes (equities, bonds, property, cash, alternatives); research shows it explains the majority of long-term portfolio return variation
C
The process of selecting a fund manager for each asset class; it determines total costs
D
The process of rebalancing a portfolio quarterly; it maintains target risk levels
Hint
