CMI — Certificate in Multi-Asset Investment Portfolio Practice Questions

During a review, an analyst finds that a portfolio is heavily weighted towards tech stocks. The tech sector experiences a downturn. What should be the first action taken?

• AA. Analyze sector performance
• BB. Invest more in tech
• CC. Sell all tech stocks
• DD. Increase international exposure

In constructing an optimum portfolio, which strategy should be employed for asset allocation?

• AA. Market-cap weighting
• BB. Follow the trend
• CC. Mean-variance optimization
• DD. Equal weightage to all assets

A financial advisor is constructing a portfolio for a risk-averse client primarily interested in capital preservation. What is the best investment?

• AA. Commodities
• BB. Hedge funds
• CC. Municipal bonds
• DD. Stocks