A Portfolio Management Strategy That Overweights a Particular Industry,relative to the Benchmark

question 53

Multiple Choice

A portfolio management strategy that overweights a particular industry,relative to the benchmark portfolio,based on the next expected phase of the business cycle is called

• A) Tactical asset allocation.
• B) Indexing.
• C) Sector rotation.
• D) Contrarian investing.
• E) Bottom up investing.

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Definitions:

Heuristic

A problem-solving approach that employs a practical method or various shortcuts to produce solutions that are not guaranteed to be optimal, but sufficient for the immediate goals.

Information Retrieval

The process of obtaining relevant information from a collection of resources in response to a specific query or need.

Hill-climbing

A mathematical optimization technique that involves iterative progress toward a solution or goal by incrementally improving from the current state.

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes, often leading to quicker but sometimes less accurate judgments.