Rebalancing Quiz

Question: Which of the following statements is (are) true with respect to the appropriateness of the alternative rebalancing strategies? (I) A buy and hold strategy will always perform at least as well as a constant mix strategy. (II) If the ending values of both the risky and risk free assets are equal to their respective beginning values, then a constant mix strategy will have yielded nothing. (III) Constant proportion portfolio insurance strategies generally do much better in a market with a stable trend as opposed to a volatile market. (IV) In a market with a stable trend, the constant proportion portfolio insurance strategy will always produce a far more superior performance than a buy and hold strategy. (a) II only. (b) II and III only. © III and IV only. (d) I, II, and III only.

C ?

c no doubt




def C and i will tell u why We know III) & IV) has to be in the answer and (I) cannot be


C-- I is def. wrong III is right…trending market, CPPI outperforms other 2.


C is correct

Anyone who didn’t choose c) should take a break.

deriv108 Wrote: ------------------------------------------------------- > Anyone who didn’t choose c) should take a break. lol