Q237
Asset allocation affects the investor's return by______________.
A.
altering the returns on individual assets
B.
weighting the portfolio return by the allocation
AnswerC.
assuring diversification
D.
increasing the investor's use of mutual funds
Answer: Option B
Solution
Answer: Option B
Solution:
Asset allocation affects the investor's return by weighting the portfolio return by the allocation. Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon.