cpcu 556 vocab ch 8

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  1. Asset allocation
    A system for determining what percentages of investment portfolio should be in different asset classes and subclasses
  2. Risk averse strategy
    In asset allocation, dividing a portfolio amond several asset classes, which often have different risk characteristics
  3. Asset concentration strategy
    In asset allocation, a portfolio that is not diversified among several asset classes
  4. Aggressive (investment) policy
    A policy that seeks to maximize profits and thus accepts above average investment risk
  5. Defensive (investment) policy
    A policy that seeks to minimize investment risk and, perhaps, accepts correspondingly lower profit
  6. Asset concentration
    The allocation of the investments in a portfolio to only one asset class or even to just a few issues within an asset class
  7. Modern portfolio theory
    the controlling of risk for the whole portfolio by allocationg separate portions of the portfolio among asset classes that may each be volatile, but whose returns are uncorrelated or have low correlations with each other
  8. Countercyclical movement of bond prices
    the rise of investment grade bond prices against a significant decline in common stock prices, during various past recessions or depressions
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cpcu 556 vocab ch 8

cpcu 556 vocab ch 8
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