Author Question: Tatiana is following a fixed weighting approach to managing her portfolio, which on January 1 ... (Read 45 times)

awgagawg · **on:** Mar 29, 2022

Question 1

Tactical asset allocation is most suitable for
◦ young, single individuals with good incomes.
◦ retirees.
◦ large institutional investors.
◦ investors who have already accumulated a fair amount of wealth.

Question 2

Tatiana is following a fixed weighting approach to managing her portfolio, which on January 1 consisted of 45% common stock, 40% bonds, and 15% short-term securities. Because stocks had a good year, at the end of the year, it consisted of 55% common stock, 35% bonds and 10% short-term securities. As a result,
◦ Tatiana should leave her portfolio as it is to take advantage of momentum in stocks.
◦ she should sell stock and buy bonds and short-term securities to restore the original weightings.
◦ she should sell stock index futures to protect herself from falling prices.
◦ she should sell stock and increase the proportions of bonds and short-term securities because she is now one year older.

knguyen · **Reply #1 on:** Mar 29, 2022

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