n NISM Certifications
X NISM Series X
Medium

Which situation would trigger rebalancing of an investor’s portfolio?

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

Options

  1. A

    The fund manager deviates from the benchmark

  2. B

    The portfolio’s actual asset allocation drifts from target proportions

  3. Both of the above

    Correct answer

  4. D

    None of the above

Why this is the answer

Rebalancing is prompted when the portfolio drifts from its target allocation due to market movements or fund management decisions, or both.

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