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LOS d: Discuss the benefits and costs of rebalancing a portfolio to the investor’s strategic asset allocation.
Q1. All of the following are costs associated with rebalancing a portfolio EXCEPT:
A) deferral costs.
B) brokerage commissions.
C) tax costs.
Q2. Which of the following statements correctly identifies a benefit of active management?
A) Most portfolio managers can add value through active management.
B) Trading provides liquidity to capital markets.
C) Studies have shown more frequent rebalancing to increase portfolio returns.
Q3. Which of the following statements regarding rebalancing and correlation is TRUE?
A) Negatively correlated asset classes need rebalancing more frequently than positively correlated asset classes.
B) Perfect positive correlation between asset classes implies the greatest need for rebalancing.
C) The need to rebalance is independent of the correlation between the securities or the asset classes.
Q4. Which of the following costs are NOT considered component costs of trading prompted by portfolio revisions?
A) Opportunity costs.
B) Brokerage fees.
C) Interest expense.
Q5. Which of the following statements about trading strategies is TRUE?
A) A disciplined rebalancing strategy typically underperforms a buy and hold strategy.
B) A buy and hold strategy may not satisfy the current asset allocation needs of a client.
C) A buy and hold strategy is best with respect to asset allocation because it has the lowest trading costs. | 
发表于 2009-4-10 12:54
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