optiix

Which of the following asset allocation strategies passively assumes that risk tolerance is directly related to wealth levels?

A) Constant mix.

B) Constant proportion portfolio insurance (CPPI).

C) Buy and hold.

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This is the definition of a buy and hold strategy. Constant mix strategies take a contrarian view of investing in order to maintain a constant asset allocation regardless of wealth levels. CPPI is a momentum-based strategy that aggressively increases exposure to risky assets in a rising market.