Hello, here is the background info to the question:
Question and possible answers:
The changes that were allowed in OHF’s strategic asset allocation in Phase 4 are best classified as relating to changes in:
A. goals
B. beliefs
C. constraints.
The answer says that B is correct: “In Phase 4, lower oil prices and reduced production would have resulted in substantial declines in cash inflows that management perceived to be long term in nature. To compensate for these changes, management sought both lower withdrawals and increased equity exposure to bolster its declining cash inflows.”
However, why is C wrong? Given the need for “lower withdrawals”, doesn’t this imply lower liquidity requirements, and hence a change in constraints?