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D. Stringent FIFO (***)
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A passive asset allocation strategy that involves establishing specific targeted percentages for the various
asset classes and rebalancing only as necessary to maintain those percentages as long as the investor's
investment objectives remain unchanged is called:
A. interactive asset allocation.
B. tactical asset allocation.
C. strategic asset allocation.
D. dynamic asset allocation.
Answer: C
Explanation:
A passive asset allocation strategy that involves establishing specific target percentages for
the various asset classes and rebalancing only as necessary to maintain those percentages as long as
the investor's investment objectives remain unchanged is called strategic asset allocation. Tactical asset
allocation is an active strategy that involves trying to time the market to some extent. Dynamic asset
allocation is also an active strategy in which the portfolio mix is adjusted as markets rise and fall, such that
the weighting is heaviest in those asset classes that can be expected to perform well under the current
economy. Interactive asset allocation is a fictitious strategy.


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