Asked by Khalil Vonner on May 27, 2024
Verified
A portfolio consists of three index funds: an equity index accounting for 40% of the total portfolio, a bond index accounting for 30% of the total portfolio, and an international index accounting for 30% of the total portfolio. After each quarter the portfolio manager buys and sells some of each sector to preserve the original weights for each sector. This is an example of ________.
A) a passively managed core with an actively managed component
B) a totally passively managed fund
C) passive asset allocation with active security selection
D) active asset allocation with passive security selection
Passively Managed
Investment strategies that aim to replicate the performance of a specific index or benchmark as closely as possible, without active decision-making by managers.
Equity Index
A benchmark that represents the performance of a group of stocks, indicating the overall trend in the equity market.
Portfolio Manager
A professional responsible for making investment decisions and overseeing a portfolio of assets to achieve the investor's objectives.
- Describe the principles of active and passive fund management strategies.
Verified Answer
Learning Objectives
- Describe the principles of active and passive fund management strategies.
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