Question

When market conditions are such that a passively managed portfolio no longer meets its target allocation, the tool most commonly used to rectify the situation is A) tactical management B) re-targeting C) sector rotation D) rebalancing

Answer 1

Answer:

D) rebalancing

Explanation:

Rebalancing in domain of marketing can be regarded as a process involving realiigment of weighting of portfolio of particular asset. It involves activities such as buying or even selling of asset in portfolio so that desired allocation/ risk is been maintaned. It should be noted that When market conditions are such that a passively managed portfolio no longer meets its target allocation, the tool most commonly used to rectify the situation is rebalancing.