The Constant-Ratio Plan

question 54

Multiple Choice

The constant-ratio plan

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

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Definitions:

Emotion Processing

The mechanism by which emotional information is analyzed, evaluated, and acted upon by an individual.

Neurons

Specialized cells in the nervous system that transmit information through electrical and chemical signals.

Impulses

Sudden, involuntary urges to act or respond quickly, often without thoughtful consideration of consequences.

Activate-Inhibit

A cognitive function involving the activation of relevant responses and suppression of irrelevant or inappropriate ones.