Money Management – Quiz #5 Welcome to Money Management - Quiz #5! 1. What is the difference between Asset Allocation and Position Sizing? Asset Allocation deals with big-picture decisions such as maximum/ minimum sector weightings or cash weightings. Position sizing deals with maximum/ minimum security weightings. Asset allocation & Position sizing are similar concepts. 2. What is the difference between low beta stocks and non correlated securities? Low beta stocks move in opposing direction to the broad markets while non correlated stocks have no little or no relationship to market moves. Low beta stocks move less than the market up or down. Non-correlated stocks have no little or no relationship to market moves. They are the same concept. 3. What is the biggest downfall of a negatively correlated position when trying to hedge? Negatively correlated securities fall when markets rise. Because markets rise over time, time works against these securities. Your timing in & out must be accurate. Both B & C are downfalls of negatively correlated securities. Time's up Post Navigation ← Previous PostNext Post → Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment.
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