Exam 18: Asset Allocation

Stock prices are influenced the most by

Your asset allocation decision should not consider

Investors who are 30 to 50 years old tend to focus their allocation on ________ because they can afford the risk.

Which of the following would not be a good method of asset allocation?

Common stock diversification strategies include diversifying among stocks across industries and among stocks across countries.

REITs are

The returns from investing in stocks and from investing in bonds are not highly correlated.

Proper asset allocation can

As you allocate more of your investment portfolio to bonds,you reduce your exposure to interest rate risk,but increase your exposure to market risk.

The price you pay when purchasing an option is referred to as an advance.

Mortgage REITs invest in mortgage loans,while equity REITs invest in real estate stocks or other equities.

Which of the following is a true statement about diversification?

Bond

The greater the proportion of stocks to bonds in your portfolio,the greater the ________ risk.

Asset allocation uses what to reduce your risk from investing?

After September 11,2001,General Electric's share price dropped significantly.This was because of the

Asset allocation should be restricted to stocks because they have the highest potential returns.

When you compile a portfolio of stocks,you should avoid including stocks that exhibit

If stock prices overall decline in a given month,a well-diversified portfolio will likely experience

As you allocate more of your investment portfolio to bonds,you reduce your exposure to ________ risk,but increase your exposure to ________.