Session 12: Portfolio Management
Reading 54: Basics of Portfolio Planning and Construction
LOS f: Explain the definition and specification of asset classes in relation to asset allocation.
When preparing a strategic asset allocation, how should asset classes be defined with respect to the correlations of returns among the securities in each asset class?
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A) |
High correlation within asset classes and low correlation between asset classes. | |
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B) |
Low correlation within asset classes and high correlation between asset classes. | |
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C) |
Low correlation within asset classes and low correlation between asset classes. | |
The portfolio diversification benefits from strategic asset allocation result from low correlations of returns between asset classes. Asset classes should consist of assets with similar characteristics and investment performance, which means correlations within an asset class are relatively high. | 
发表于 2011-3-24 16:19
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