An Active Asset Allocation Strategy Involves ________

question 25

Multiple Choice

An active asset allocation strategy involves ________.

• A)investing in the shares of companies which are price takers
• B)maintaining approximately the same proportions of a portfolio in each asset-class over time
• C)varying the proportions of a portfolio in each asset-class in response to changing market conditions
• D)selecting individual securities in different sectors that are believed to be undervalued

---

Definitions:

Isoquant

A curve that represents all the combinations of inputs that produce the same level of output in production theory.

Output

The aggregate output of merchandise or services generated by a company, sector, or economic system.

Production Function

A mathematical model describing the relationship between the inputs used in production and the resulting output of goods or services.

Returns To Scale

The change in output as a result of a proportional change in all input factors in the production process.