17.) Which of the following statements is most accurate?

A.) A strategic asset allocation portfolio is based on short-term expectations and an investor should expected higher portfolio turnover and higher associated fees.

B.) A tactical asset allocation portfolio is based on short-term expectations and an investor should expected higher portfolio turnover and higher associated fees.

C.) A strategic asset allocation portfolio is based on long-term expectations and an investor should expected higher portfolio turnover and higher associated fees.

D.) A tactical asset allocation portfolio is based on long-term expectations and an investor should expected higher portfolio turnover and higher associated fees.

E.) A tactical asset allocation portfolio is based on long-term expectations and an investor should expected lower portfolio turnover and lower associated fees.

For problem 18, use the table below which summarizes the expected return and standard deviation of five different investment portfolios

	E(R)	Sigma
P1	15.0%	8.0%
P2	18.0%	12.0%
P3	12.0%	5.0%
P4	7.0%	4.0%

P5 13.0%, 4.0%

18.) An investor has a $100k portfolio. In exactly five years, the investor wants to take the portfolio, liquidate it, and put down a $200k deposit on a new home any expected portfolio value below $200k is considered unacceptable. The risk free rate is 2.0%. Hint: Consider shortfall risk first.

A.) Portfolio 1

B.) Portfolio 2

C.) Portfolio 3

D.) Portfolio 4

E.) Portfolio 5