Security selection refers to
A)choosing which securities to hold based on their valuation.
B)investing only in "safe" securities.
C)the allocation of assets into broad asset classes.
D)top-down analysis.

Question

Quizplus · Accepted Answer

Security selection is the process of choosing which specific securities to hold in a portfolio, based on their valuation and other fundamental analysis. This is different from asset allocation, which focuses on allocating the portfolio to broad asset classes. Investing only in "safe" securities would not necessarily be a sound approach, as it may not generate sufficient returns. Top-down analysis is a broader approach to investment strategy that starts with economic and market trends, rather than focusing on specific securities.

Security Selection Refers to