The Constant- Ratio Plan

question 20

Multiple Choice

The constant- ratio plan

• A) requires the establishment of trigger points for portfolio rebalancing.
• B) utilises a predetermined ratio between desired current yield and expected capital gains.
• C) is an attempt to time the cyclical movements of the market.
• D) strictly adheres to a buy- and- hold strategy.

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Definitions:

Internal Control Problems

Weaknesses or failures in a company’s system of policies and procedures that govern its operations and financial reporting.

Gaps

Refers to missing elements or disparities in data, knowledge, or performance that need to be addressed.

Slow Payments

Payments made by a debtor that are consistently made later than agreed upon terms, leading to delayed receipt of funds by the creditor.

Days' Cash

The average number of days a company takes to collect cash from its sales.