Moving money in and out of the market based on your market expectations is called ________ and tends to lead to returns that are ________ than the overall market return, assuming that the market is relatively efficient.
A)asset allocation; higher
B)asset allocation; lower
C)market timing; higher
D)market timing; lower
E)security selection; higher

Question

Quizplus · Accepted Answer

Market timing involves moving money in and out of the market based on predictions about market performance. However, because markets are relatively efficient, meaning that all available information is already reflected in stock prices, consistently outperforming the market through market timing is very difficult. As a result, returns from market timing tend to be lower than the overall market return.

Moving Money in and Out of the Market Based on Your