n NISM Certifications
V-A NISM Series V-A
Medium

When the asset allocation is maintained as a constant ratio by regular rebalancing of the portfolio, it is known as ________.

Practice question from Nism VA Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Dynamic asset allocation

  2. B

    Flexible asset allocation

  3. Fixed asset allocation

    Correct answer

  4. D

    Variable asset allocation

Why this is the answer

In a fixed asset allocation strategy, the portfolio maintains a specific ratio (e.g., 50:50 debt-equity). If market conditions cause the proportion of one asset class to increase or decrease, rebalancing is done to bring the portfolio back to the target ratio.

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