Asked by
Dominique Pesesky
on Nov 04, 2024Verified
The first step a pension fund should take before beginning to invest is to
A) establish investment objectives.
B) develop a list of investment managers with superior records to interview.
C) establish asset allocation guidelines.
D) decide between active and passive management.
Investment Objectives
Specific financial goals and criteria determined by the investor that guide investment decisions and strategies.
Asset Allocation
The strategic distribution of investment across various asset classes such as stocks, bonds, and real estate to optimize risk and return.
Active Management
Attempts to achieve portfolio returns more than commensurate with risk, either by forecasting broad market trends or by identifying mispriced sectors of a market or particular securities.
- Recognize the importance of establishing investment objectives for pension funds.
Verified Answer
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Learning Objectives
- Recognize the importance of establishing investment objectives for pension funds.