The theory behind the variable ratio plan is to
A) passively buy and hold a wide variety of securities.
B) time the cyclical movements of the stock market and thereby "buy low and sell high."
C) avoid selling any security for a capital gain, and thus indefinitely avoiding the capital gains tax.
D) keep the unit cost of the portfolio at a constant level.

Question

Quizplus · Accepted Answer

The variable ratio plan is based on attempting to time the market to buy when prices are low and sell when they are high, aiming to capitalize on the cyclical movements of the stock market.

The Theory Behind the Variable Ratio Plan Is to