What are extended portfolio assets and liabilities primarily used for?

Extended portfolio assets and liabilities are primarily used for making asset allocation decisions. This concept refers to the comprehensive view of a portfolio that includes not only traditional financial assets, such as stocks and bonds, but also liabilities and other obligations. By considering both assets and liabilities in the context of a portfolio, investors can determine their risk tolerance, expected returns, and the overall allocation strategy required to meet investment goals.

When making asset allocation decisions, the relationship between assets and the associated liabilities is pivotal. It allows portfolio managers to align the expected cash flows from investments with the timing and amount of liabilities, ensuring that the portfolio can meet its obligations while maximizing returns. This approach provides a more nuanced understanding of risk and return, facilitating a better-informed allocation strategy based on the true financial position of the investor.

Other options mentioned may serve different purposes but do not encompass the primary role of extended portfolio assets and liabilities in the context of portfolio management and decision-making.