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Which of the following statements is/are not correct with respect to the ‘Constant Mix Strategies’ of asset allocation?I. Investors adopting these strategies tend to maintain an exposure to stocks that are in constant proportion of their wealth. II. The risk-tolerance level of the investors varies proportionately with the level of theirwealth. III. Reversals in stock markets oppose constant mix strategies over the buy and hold IV. strategies.

Question:

Which of the following statements is/are not correct with respect to the ‘Constant Mix Strategies’ of asset allocation?I. Investors adopting these strategies tend to maintain an exposure to stocks that are in constant proportion of their wealth. II. The risk-tolerance level of the investors varies proportionately with the level of theirwealth. III. Reversals in stock markets oppose constant mix strategies over the buy and hold IV. strategies.

A.

Only (I) above

B.

Only (II) above

C.

Only (III) above

D.

Both (I) and (II) above

Answer» c. Only (III) above

Note: The above multiple-choice question is for all general and Competitive Exams in India