hinsafdar

Dynamic asset allocation is most suitable for investors who:

A) undertake the asset-liability approach to strategic asset allocation.

B) have insignificant liabilities.

C) have a long time horizon.

---

Dynamic asset allocation is most suitable for investors who have significant liabilities and utilize the asset-liability approach to strategic asset allocation.

hinsafdar

What is the major difference between dynamic asset allocation and static asset allocation? Dynamic asset allocation:

A) considers more than one asset class while static asset allocation only considers one asset class at a time.

B) considers asset and liability management simultaneously while static asset allocation does not.

C) takes a multi-period view of the investment horizon while static asset allocation does not.

---

Dynamic asset allocation takes a multi-period view of the investment horizon while static asset allocation does not. Dynamic asset allocation and static asset allocation both can be used for asset only or asset-liability approaches to strategic asset allocation. Both dynamic and static asset allocation approaches consider more than one asset class.