The distribution of an investment among various broad categories of assets is known as ___________.
A) market timing
B) asset allocation
C) security selection
D) asset management
E) margin timing

Question

Quizplus · Accepted Answer

Asset allocation refers to the process of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash equivalents, based on an investor's goals, risk tolerance, and investment time frame. Market timing refers to the practice of trying to predict the future direction of market prices and making investment decisions based on those predictions. Security selection refers to the process of choosing individual securities to invest in, while asset management refers to the overall management of a portfolio of assets. Margin timing refers to the practice of using margin to buy securities, with the intent of profiting from price fluctuations.

The Distribution of an Investment Among Various Broad Categories of Assets