Question
Question 1 Per Daryanani (2008), the most efficacious approach to rebalancing is a function of both size of rebalancing boundary and the frequency of looking.
Question 1 Per Daryanani (2008), the most efficacious approach to rebalancing is a function of both size of rebalancing boundary and the frequency of "looking."
Select one:
True
False
Question 2
Neither serial correlation nor mean reversion contribute to the gains from rebalancing.
Select one:
True
False
Question 3
Tax-loss harvesting can be a benefit if there are gains to offset (and thus a tax savings to invest and compound)
Select one:
True
False
Question 4
Tax-loss and/or tax-gain harvesting will depend on expected differences in inter-temporal tax rates
Select one:
True
False
Question 5
Tax-loss harvesting creates permanent gains through tax savings and should be pursued whenever losses are available to be harvested.
Select one:
True
False
Question 6
The indicated strategy will depend on the nature of the investments: high-return, low-return, tax- efficient, or tax-inefficient
Select one:
True
False
Question 7
Using a standard mean-variance analysis, Cho and Kuvvet find that dollar-cost averaging does little or nothing to lower risk.
Select one:
True
False
Question 8
Prior to Cho & Kuvvet (2015), which of the following were offered as reasons that investors might prefer DCA to investing a lump sum?
I. behavioral errors
II. statutory limitations on IRA contributions
III. the seasonality of equity returns
IV. high conditional expected returns
V. mean reversion in stock prices
Select one:
I, II, and III
I, III, IV, and V
II, III, IV, and V
All of the above
Question 9
Opportunistic rebalancing, per Daryanani (2008) controls portfolio drift, but also provides significant return improvements by capturing buy-low/sell-high opportunities as asset classes sporadically drift relative to each other.
Select one:
True
False
Question 10
Daryanani's 2008 study showed that trading costs and tax deferral can be quite large compared with rebalancing benefits.
Select one:
True
False
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