A Buy-And-Hold Strategy Is Generally Riskier Than a Market-Timing Strategy

question 52

True/False

A buy-and-hold strategy is generally riskier than a market-timing strategy.

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Definitions:

Carrying Cost

Expenses associated with holding or storing inventory, including insurance, storage, and opportunity costs of invested capital.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period, used in capital budgeting to analyze the profitability of an investment.

Default Probability

The likelihood that a debtor will fail to make required payments on their debt.

Monthly Interest Rate

The interest rate that is applied on a monthly basis to the principal of a loan or mortgage to calculate the monthly interest payment.