Appropriate Asset Allocation for Medium Risk Investor

Medium Investment Policy And Allocation Asset Allocation

An investor is reviewing their portfolio's asset allocation strategy to better align with their long-term investment goals and risk tolerance. Currently, their portfolio consists of 70% equities and 30% fixed income. Given the investor's medium risk tolerance and a goal of capital growth, they are considering a more balanced approach. As they evaluate potential adjustments, they understand that asset allocation significantly impacts both the risk and return profile of their investments.

Which of the following asset allocation strategies would be most appropriate for this investor?

Increase equity allocation to 80% and decrease fixed income to 20%.

Maintain the current allocation of 70% equities and 30% fixed income.

Change the allocation to 50% equities and 50% fixed income.

Hint

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% Correct56%