If a portfolio manager has a good ability to forecast overall market but a poor ability to select undervalued securities, the following makes sense for him.
A.
Concentrate holdings in selected undervalued stocks and shift beta below and above the desired long-term average based on market forecasts
B.
Hold a broadly diversified portfolio of stocks and keep beta stable at the desired long-term average
C.
Concentrate holdings in selected undervalued stocks and keep beta stable at the desired long-term average
D.
Hold a diversified portfolio of stocks and shift beta above and below desired long-term average based on market forecasts
Chosen Answer:
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