A Passive Asset Allocation Strategy Involves _________

question 34

Multiple Choice

A passive asset allocation strategy involves _________.

• A) investing in the stock 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:

Probability Of Default

The likelihood that a borrower will be unable to meet its debt obligations.

EOQ

Economic Order Quantity, a formula used to determine the ideal quantity of inventory to minimize total costs related to ordering, receiving, and holding inventory.

Carrying Cost

The total cost of holding inventory, including storage, insurance, taxes, depreciation, and obsolescence, which affects a company's overall profitability.

One-Shot Approach

A method or strategy applied only once, typically without the intention of repetition or long-term implementation.