Strategic asset allocation is based on:

A Short-term market timing

B Long-term target percentages for each asset class based on risk/return objectives

C Daily trading signals

D Only manager skill

✓ Correct Answer: Option B

Strategic allocation sets long-term target weights based on the investors objectives, constraints, and capital market expectations.

💡 Why is B) the correct answer?

The correct answer to the question "Strategic asset allocation is based on:" is Option B: Long-term target percentages for each asset class based on risk/return objectives.

The other options — A) Short-term market timing, C) Daily trading signals, D) Only manager skill — are incorrect for this CFA Exam Prep question. As explained above: Strategic allocation sets long-term target weights based on the investors objectives, constraints, and capital market expectations.

📚 About This CFA Exam Prep Practice Question

This 2-level CFA Exam Prep question from the Portfolio Management topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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Strategic asset allocation is based on:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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