Question 1

Per Daryanani (2008), the most efficacious approach to rebalancing is a function of both size of rebalancing boundary and the frequency of "looking."

Select one:

True

False

Question 2

Neither serial correlation nor mean reversion contribute to the gains from rebalancing.

Select one:

True

False

Question 3

Tax-loss harvesting can be a benefit if there are gains to offset (and thus a tax savings to invest and compound)

Select one:

True

False

Question 4

Tax-loss and/or tax-gain harvesting will depend on expected differences in inter-temporal tax rates

Select one:

True

False

Question 5

Tax-loss harvesting creates permanent gains through tax savings and should be pursued whenever losses are available to be harvested.

Select one:

True

False

Question 6

The indicated strategy will depend on the nature of the investments: high-return, low-return, tax- efficient, or tax-inefficient

Select one:

True

False

Question 7

Using a standard mean-variance analysis, Cho and Kuvvet find that dollar-cost averaging does little or nothing to lower risk.

Select one:

True

False

Question 8

Prior to Cho & Kuvvet (2015), which of the following were offered as reasons that investors might prefer DCA to investing a lump sum?I. behavioral errors II. statutory limitations on IRA contributions III. the seasonality of equity returns IV. high conditional expected returns V. mean reversion in stock prices

Select one:

1. I, II, and III

2. I, III, IV, and V

3. II, III, IV, and V

4. All of the above

Question 9

Opportunistic rebalancing, per Daryanani (2008) controls portfolio drift, but also provides significant return improvements by capturing buy-low/sell-high opportunities as asset classes sporadically drift relative to each other.

Select one:

True

False

Question 10

Daryanani's 2008 study showed that trading costs and tax deferral can be quite large compared with rebalancing benefits.

Select one:

True

False