Which one of the following decisions falls under the category of asset allocation?
A)Purchasing Ford stock rather than General Motors stock
B)Determining that thirty percent of a portfolio should be invested in bonds
C)Adopting a passive investment strategy
D)Deciding to actively analyze individual securities
E)Deciding to use an online broker

Question

Quizplus · Accepted Answer

Asset allocation involves determining how to distribute investments among different asset classes such as stocks, bonds, and real estate. Deciding that thirty percent of a portfolio should be invested in bonds is an example of asset allocation. The other choices are related to specific investment decisions or methods, but not to overall portfolio allocation.

Which One of the Following Decisions Falls Under the Category