n NISM Certifications
XXI NISM Series XXI-A
Medium

A portfolio manager, after observing weight fluctuations in the sectors of his portfolio, rebalances it to the original sector weightings. Which rebalancing strategy is being used?

Practice question from NISM XXI A for PMS - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Indexing Strategy

  2. Constant Mix Strategy

    Correct answer

  3. C

    Constant Beta Strategy

  4. D

    Constant Force Strategy

Why this is the answer

The constant mix strategy involves maintaining fixed sector or asset allocations by rebalancing periodically.

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