Qualified Financial Adviser (QFA) Investments Exam 2 Practice Test

Which of the following would be considered traditional investment asset classes?

Bonds and Equities. Bonds and Gold. Gold and Equities. Bonds, Gold and Equities.

Correct Answer:

Bonds and Equities.

Explanation:

Traditional investment asset classes are broad categories of investable assets with distinct risk and return profiles used as core building blocks in portfolios. The two classic traditional asset classes are equities (ownership in companies, with potential for capital growth and dividends) and bonds (debt instruments, providing income and generally lower risk than equities). Gold, while a widely used investment and a common diversification tool, is a commodity rather than a traditional core asset class. It doesn’t generate income in the way bonds do and its price behavior isn’t driven by the same cash-flow dynamics as equities. So the pair that fits the traditional framework is bonds and equities.

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