A Strategy of Passive Management Is One in Which, Once

question 39

Multiple Choice

A strategy of passive management is one in which, once established, the portfolio is

• A) Readjusted on a regular basis
• B) Only readjusted if prices decline
• C) Largely left alone
• D) Only readjusted if prices rise
• E) Readjusted at the manager's discretion

---

Definitions:

Policyholder's Perspective

Insights or considerations from the viewpoint of an individual or entity that owns an insurance policy.

Fiduciary Responsibility

A legal obligation requiring an individual or organization to act in the best interest of another party, typically in financial matters.

Prudent Investor Rule

Prudent Investor Rule is a legal guideline for fiduciaries that mandates investment strategies should be made as a prudent investor would, considering risk, return, diversification, and the objectives of the trust or beneficiary.

Active Portfolio Management

A strategy where managers make specific investments with the goal of outperforming an investment benchmark index.