A Market Timing Approach That Increases the Proportion of Funds

question 27

Multiple Choice

A market timing approach that increases the proportion of funds in stocks when the stock market is expected to be rising,and increases cash when the stock market is expected to be falling is a:

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

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Definitions:

Deferred Tax Liability

A tax obligation that a company owes but does not have to pay until a future date, usually due to timing differences between accounting practices and tax laws.

Tax Liability

The total amount of taxes owed by an individual, company, or other entity to a taxing authority.

Income Tax Expense

The amount charged against a company's profits due to income taxes, reflecting the cost of complying with jurisdictions' tax laws.

Capital Lease

A lease agreement in which the lessee records the leased asset as if it was purchased with financing, reflecting it on their balance sheet.