A Market Timing Approach That Increases the Proportion of Funds

question 14

Multiple Choice

A market timing approach that increases the proportion of funds in stocks when the stock market is expected to rise, and increases cash when stocks are expected to fall is a:

• A) strategic asset allocation.
• B) tactical asset allocation.
• C) portfolio optimization.
• D) liquidity timing allocation.

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Definitions:

Piaget

A reference to Jean Piaget, a Swiss psychologist known for his pioneering work in child development and cognitive psychology.

Kohlberg

Refers to Lawrence Kohlberg's theory of moral development, which proposes stages through which individuals progress in their moral reasoning.

Bandura

Albert Bandura, a psychologist who is known for his work on social learning theory and the concept of self-efficacy.

Trust Vs. Mistrust

The first stage in Erik Erikson's theory of psychosocial development, where infants develop a sense of trust or mistrust largely depending on the reliability and care of their primary caregivers.