Brooke has decided to invest 55% of her money in large company stocks, 40% in small company stocks, and 5% in cash. This is a(n)________ decision.

Question

Quizplus · Accepted Answer

Brooke's decision to distribute her money in different asset categories is an example of asset allocation. Asset allocation is the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash, in order to achieve a balance of risk and return based on an investor's financial objectives and risk tolerance. It is a strategic decision that is meant to provide more stability and diversification to a portfolio over time.

Brooke Has Decided to Invest 55% of Her Money in Large