A market timing approach that increases the proportion of funds in stocks when the stock market is expected to rise, and increases cash when stocks are expected to fall is a:
A) strategic asset allocation.
B) tactical asset allocation.
C) portfolio optimization.
D) liquidity timing allocation.

Question

Quizplus · Accepted Answer

Tactical asset allocation involves adjusting the proportion of assets in a portfolio based on short-term market forecasts, such as increasing stock holdings when a rise is expected and increasing cash when a fall is anticipated.

A Market Timing Approach That Increases the Proportion of Funds