You actively research macroeconomic factors and move between stocks and bonds in an attempt to time the market. Your investment is in stock and bond index funds. You have a(n) _____ asset allocation strategy and a(n) _____ security selection strategy.
A) active; active
B) active; passive
C) passive; passive
D) passive; active
E) None of the above.

Question

Quizplus · Accepted Answer

Your strategy is active in terms of asset allocation because you are trying to time the market by moving between stocks and bonds. However, it is passive in terms of security selection because you invest in index funds, which do not involve selecting individual securities.

You Actively Research Macroeconomic Factors and Move Between Stocks and Bonds