Market timers attempt to earn excess returns by:
A)adjusting the ratio of aggressive equity securities to defensive equity securities.
B)shifting the mix of short-term securities to long-term securities.
C)varying the percentage of portfolio assets in equity securities.
D)adjusting the ratio of primary market securities to capital market securities.

Question

Quizplus · Accepted Answer

Market timers attempt to earn excess returns by varying the percentage of portfolio assets in equity securities, also known as equity allocation. By adjusting the equity allocation, market timers try to take advantage of market trends and earn higher returns. Adjusting the mix of short-term vs. long-term securities, the ratio of primary market securities to capital market securities, or the ratio of aggressive to defensive equity securities might also be part of a market timing strategy, but they are not the primary focus.

Market Timers Attempt to Earn Excess Returns By