n NISM Certifications
X NISM Series X
Medium

Risk profiling is essential because it informs strategic asset allocation decisions by aligning investment portfolios with an investor’s risk tolerance, financial goals, and time horizon.

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Dynamic asset allocation

  2. Strategic asset allocation

    Correct answer

  3. C

    Tactical asset allocation

  4. D

    Both strategic and tactical asset allocation

Why this is the answer

Risk profiling primarily influences the long-term, goal-based strategic asset allocation, ensuring investments match the investor's risk capacity.

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