The management of the portfolio of securities held by an investment company is usually handled by ________.
Click on the arrows to vote for the correct answer
A. B. C. D.C
The management of the portfolio of securities held by an investment company is usually handled by a separate investment management company which is hired by the board of directors.
The management of the portfolio of securities held by an investment company is usually handled by a separate investment management company, which is option C.
An investment company is a type of financial institution that pools money from investors and uses that money to invest in various financial assets such as stocks, bonds, and other securities. The investment company aims to generate returns for its investors based on the performance of the underlying portfolio.
Option A, the board of directors, refers to the governing body responsible for overseeing the operations and strategic decisions of the investment company. While the board of directors plays an important role in setting the overall direction of the company, they typically do not handle the day-to-day management of the investment portfolio.
Option B, the CEO (Chief Executive Officer) or the CFO (Chief Financial Officer), are executives within the investment company who are responsible for the overall management and financial operations of the company. However, their primary role is not specifically focused on managing the portfolio of securities held by the investment company.
Option D, a group of elected shareholders, does not typically handle the management of the portfolio of securities. Shareholders are the owners of the investment company and have voting rights, but they are not directly involved in the day-to-day management of the investment portfolio.
Therefore, the most common practice is for investment companies to outsource the management of their portfolios to separate investment management companies. These investment management companies are specialized entities that have expertise in analyzing financial markets, selecting securities, and managing investment portfolios. They have dedicated portfolio managers and research teams that make investment decisions on behalf of the investment company. This allows the investment company to focus on its core operations while benefiting from the specialized expertise of the investment management company.