What is Asset Allocation

Question

Accepted Answer

Asset allocation is the strategy of dividing investments among different asset classes to achieve a balance of risk and return.

Asset allocation involves spreading investments across different asset classes such as stocks, bonds, and cash equivalents.
The goal of asset allocation is to create a diversified portfolio that can help manage risk and maximize returns.
Investors may adjust their asset allocation based on their risk tolerance, investment goals, and market conditions.
For example, a conservative investor may have a higher allocation to bonds, while an aggressive investor may have a higher allocation to stocks.

Popular interview questions of Emerging Leader