The first major step in asset allocation is:
A)assessing risk tolerance.
B)analyzing financial statements.
C)estimating security betas.
D)identifying market anomalies.
E)none of the above.

Question

Quizplus · Accepted Answer

Assessing risk tolerance is the first major step in asset allocation because it helps to determine the investor's tolerance for risk and their investment objectives. This information is critical in determining how to allocate assets in a portfolio to achieve a balance between risk and return. The other options listed may be involved in the asset allocation process, but they are not the first major step.

The First Major Step in Asset Allocation Is