1) List the 4 decisions involved or constructing an investment strategy. 2)In ad
ID: 2683808 • Letter: 1
Question
1) List the 4 decisions involved or constructing an investment strategy.2)In addition to measuring profitability, efficiency and risk, the specific uses of financial ratios in the areas of investment cited by the textbook are ________________, ________________, and ___________________.
3) Which of the active management strategies in the fundamental analysis category is most suitable for structuring an investment portfolio? Selecting individual stocks to buy or sell? (Points : 3)
________________ and ______________ are examples of "Top Down" investment strategy.
Explanation / Answer
1) What asset classes should be considered for investment?
2) What policy weights should be assigned to each eligible asset class?
3) What are the allowable allocation ranges based on policy weights?
4) What specific securities or funds should be purchased for the portfolio?
Stock Valuation, Assigning Credit Ratings on Bonds, and Predicting Insolvency [Bankruptcy] of firms.
Top Down is most suitable for structuring an investment portfolio because of its macro-perspective that progresses into asset class rotation and sector rotation. These Top Down processes of asset rotation and sector rotation provide the portfolio framework, that in turn is the context for security selection
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