DAL

Definition

Diversified Asset List (DAL) is a portfolio of investments spread across various asset classes to reduce risk. It aims to balance the potential return and risk by investing in different financial instruments, industries, and other categories.

5 Must Know Facts For Your Next Test

1. A DAL helps mitigate unsystematic risk by spreading investments across different assets.
2. The primary goal of a DAL is to achieve a more stable and predictable return.
3. Assets in a DAL can include stocks, bonds, real estate, commodities, and cash equivalents.
4. Diversification within a DAL does not eliminate systematic risk but can significantly reduce the overall portfolio risk.
5. Constructing an effective DAL requires understanding the correlation between different asset classes.

Review Questions

• What is the main purpose of creating a Diversified Asset List?
• How does a DAL help in managing investment risks?
• What types of assets are typically included in a Diversified Asset List?

Related terms

Portfolio: A collection of financial investments like stocks, bonds, commodities, cash equivalents, or other assets.

Risk Management: The process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions.

Asset Allocation: An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and investment horizon.