Fixed Weightings, Flexible Weightings, and Tactical Asset Allocation Are Three

question 22

Essay

Fixed weightings, flexible weightings, and tactical asset allocation are three approaches to asset allocation. Compare and contrast these three different approaches.

---

Definitions:

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet.

Underlying

In finance, the asset or instrument upon which a derivative or other financial contract is based.

Goodwill

An immaterial asset generated when a company is purchased at a price exceeding the fair market value of its clear net assets.

Equity Method

A method of accounting in which an investor recognizes its share of the profits and losses of an investee company in its own profit and loss statement, proportional to the investor's share of equity in the investee.