Course: Securities & Investments

1. Of the decisions listed below, which would best be categorized as asset allocation?

A. Opening an account with a full-service broker B. purchasing a stock of a company you're familiar with over one that you know nothing about C. Changing a portfolio so that it's invested in 70 percent bonds and 30 percent stocks instead of 60 percent bonds and 40 percent stocks D. Deciding to buy a stock on margin instead of using cash

2. A company's stock had the following returns over the past five years: 12.1, 15, 7.2, 9, and 5 percent. What's the geometric average return?

A. 10.45% B. 9.60% C. 8.23% D. 7.14%