An Investment Strategy That Entails Shifting the Portfolio into Industry

question 8

Multiple Choice

An investment strategy that entails shifting the portfolio into industry sectors that are expected to outperform others based on macroeconomic forecasts is termed ________.

• A) sector rotation
• B) contraction/expansion analysis
• C) life-cycle analysis
• D) business-cycle shifting

---

Definitions:

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that are financed by shareholder's equity.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its financial leverage or debt proportion.

Dividend Payout Ratio

The proportion of net income a firm pays out to its shareholders in the form of dividends.