The Choice of an Active Portfolio Management Strategy Rather Than

question 56

Multiple Choice

The choice of an active portfolio management strategy rather than a passive strategy assumes ________.

• A) the ability to continuously adjust the portfolio to provide superior returns
• B) asset allocation involving only domestic securities
• C) stable economic conditions over the short term
• D) the ability to minimize trading costs

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Definitions:

Extinction

In the context of behavioral psychology, it refers to the gradual weakening and eventual disappearance of a conditioned response when it is no longer reinforced.

Behaviorist Approach

A learning theory that focuses on observable behaviors and the ways they're learned, emphasizing the importance of external stimuli and reinforcement.

Observable Behavior

Refers to actions or reactions of an individual or system that are visible and measurable.

Cognitive Activities

Mental tasks and processes involved in the acquisition, processing, and use of knowledge.