What is 'asset allocation' and why is it considered the most important investment decision?
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A
Choosing specific securities within each asset class; it is important because security selection drives returns
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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
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C
The process of selecting a fund manager for each asset class; it determines total costs
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D
The process of rebalancing a portfolio quarterly; it maintains target risk levels