The decision on how to divide funds across the major asset classes (for example, equities, bonds, foreign securities, real estate) is referred to as the ________.

Question

Quizplus · Accepted Answer

The decision on how to divide funds across the major asset classes is commonly known as the asset allocation decision. This decision is critical in determining the overall risk and return characteristics of a portfolio. It involves weighing the risk-return tradeoff of each asset class and creating a diversified portfolio to achieve the desired investment objectives. Therefore, option D is the correct answer.

The Decision on How to Divide Funds Across the Major