Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is the primary responsibility of a portfolio manager?

1. To select and manage the assets of clients

2. To evaluate the performance of stocks

3. To negotiate with financial institutions

4. To provide legal advice to investors

The correct answer is: To select and manage the assets of clients

The primary responsibility of a portfolio manager is to select and manage the assets of clients. This role involves making investment decisions that align with the clients' financial goals and risk tolerance. Portfolio managers assess various asset classes, including stocks, bonds, and other instruments, to construct a diversified portfolio that aims to achieve optimal returns for the client while managing risk effectively. In fulfilling this responsibility, portfolio managers analyze market trends, economic conditions, and individual security performance to inform their investment strategies. Their expertise in asset allocation and risk management is critical to ensuring that the portfolio not only meets the clients' current needs but also adapts to changing market conditions and financial landscapes. The other options pertain to distinct roles within the financial industry. Evaluating the performance of stocks is typically a function of research analysts rather than the broader responsibilities of a portfolio manager. Negotiating with financial institutions often falls within the realm of investment bankers or other financial professionals focused on deal-making, while providing legal advice is the domain of legal professionals or compliance officers, not portfolio managers.