Question

Ahmed is trying to decide whether he wants to purchase shares in Ford, General Motors, or Honda, all of which are auto manufacturers. Ahmed is making a(n)

1. Asset allocation decision.
2. Security selection
3. Active strategy
4. Risk aversion

Answer 1

The correct answer is 2. Security selection.

Step-by-step explanation:

The correct answer is 2. Security selection.

When Ahmed is trying to decide whether to purchase shares in Ford, General Motors, or Honda, he is making a security selection decision. This decision involves choosing specific securities (in this case, shares of stock) from different companies. Ahmed is considering different options within the auto manufacturing sector.