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

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Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs, highlighting the trade-offs in production levels between two commodities.

Fully Employed Resources

A situation in which all available labor and capital resources are being used in the most economically efficient way.

Economic Growth

The increase in a country's output of goods and services over time, indicated by a rise in real GDP.

Poor Countries

Nations with low levels of economic productivity, low living standards, and low levels of human development indices compared to other countries.