An Active Asset Allocation Strategy Involves _________

question 78

Multiple Choice

An active 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:

Tertiary Circular Reactions

The fifth stage in Piaget's sensorimotor stage of cognitive development, occurring from about 12 to 18 months of age, where infants explore the environment and understand causality through trial and error.

Representational Ability

The cognitive skill to use symbols or signs to stand for objects, actions, or ideas, facilitating communication and abstract thinking.

Habituation

The process by which an individual becomes accustomed to a stimulus, leading to a decrease in response over time.

Visual-recognition Memory

The ability to remember and recognize previously encountered objects or individuals by sight.