According to the asset allocation, which combination constitutes the 60% invested in markets?

• A. Stock market, currencies, and commodities
• B. Government bonds only
• C. Real estate and commodities
• D. Cash and equivalents

Answer: (A)

The idea being tested is which assets count as active, market-traded exposures. The 60% in markets is best represented by assets that have transparent, daily pricing and trade on open markets: stocks (the stock market), currencies (foreign exchange), and commodities. These three categories are classic market-driven assets with visible price discovery and high liquidity, making them the core components of market exposure in many asset allocations.

Why not the other options: government bonds are fixed income and, while traded, they’re typically grouped separately from the equity/commodity market exposures and serve a different risk/return role. Cash and equivalents are cash-like, offering safety and liquidity with minimal market risk, not broad market exposure. Real estate is usually less liquid and not traded on the same daily public markets as stocks, currencies, and commodities, so it doesn’t fit the same market-exposure bucket.