Which One of the Following Decisions Falls Under the Category

question 102

Multiple Choice

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

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Definitions:

Alpha

In investing, alpha is a measure of performance on a risk-adjusted basis, comparing an investment's excess returns to the market's returns.

Seasonality

A pattern in data that repeats at regular intervals over time, often observed in sales, weather patterns, and agricultural production.

Forecast Error

The difference between the actual demand and the forecasted demand, indicating the accuracy of forecasts.

Bias

A tendency to lean in a certain direction, either in favor of or against a particular thing, person, or group compared with another, often in a way considered to be unfair.