Question
After a recession, Mark decides to invest in a sector that has historically outperformed in the early phase of business cycles. He also shorts a
After a recession, Mark decides to invest in a sector that has historically outperformed in the early phase of business cycles. He also shorts a sector that has historically underperformed in the early phase of the business cycle. Which of the following strategies would make most sense provided Mark's investment preferences?
A. Use a dedicated short strategy to go long in the financial sector and short the energy sector.
B. Use an active extension strategy to short the financial sector and go long on the utilities sector.
C. Use an active extension strategy to short the telecom sector and go long on the IT sector.
D. Use a market neutral strategy to go long in the financial sector and short the energy sector.
E. Use a market neutral strategy to go long in the financial sector and short the materials sector.
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