Question: Why is it a good idea to scale your position based on your expectations of the index s movement? It ensures constant exposure to market

Why is it a good idea to scale your position based on your expectations of the indexs movement?
It ensures constant exposure to market volatility.
It minimizes transaction costs regardless of market conditions.
It allows for greater potential profits in large moves while reducing risk in small moves.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

I have no idea how to start the cash flow operations analysis in part 1 Enron Annual Report 2000 Enron Annual Report 2000 Enron manages efficient, flexible networks to reliably deliver physical...

Q:

I need to forecast the income statement, balance sheet, and freecash flows generated by the company over a five year period on the attached company. Annual report 2015 Virgin Atlantic annual report...

Q:

I need to respond to these questions on McDonalds Analyze the corporation?s most recent financial statements and answer the following: How are the corporation?s debt securities reported on the...

Q:

Assignment 1: Forwards and Futures, Interest Rate Derivatives and Swaps Due: Monday, February 15, 2015 All assignments are due on Monday 15th February 2015 by 6:00 p.m. at the latest. Late...

Q:

The presentations, of work-in-progress on the major assignments, will occur during the tutorials in Weeks 8 and 9. The presentations are worth 5% of the total assignment. The presentations will be on...

Q:

Investments in Focus Questions 1. In what ways is gold similar to silver? 2. In what ways is gold different from silver? 3. What is the definition of volatility? 4. Why is silver more volatile than...

Q:

Hi, I need someone to do summary for the article I upload AUDITING: A JOURNAL OF PRACTICE & THEORY Vol. 28, No. 2 November 2009 pp. 1-34 American Accounting Association DOI: 10.2308 / aud.2009.28.2.1...

Q:

Can you please help me solve these 10 Econ questions? I also attached the chapter just in case. Thanks so much!! :) MARKETS AND HOW THEY WORK 177 9.0 CHAPTER 9 LEARNING GOALS After reading this...

Q:

1. Why was Olam vulnerable to a short-seller attack in 2012? 2. Identify one or more businesses that you think Olam should divest. Give your reasons. 3. What are the lessons learnt from Olam's...

Q:

HI PLEASE ANSWER ALL 1. Assume the market for apples is initially in equilibrium. Which of the following will result in a higher equilibrium price of apples? a. An increase in both the demand for and...

Q:

What role does a real estate agent play in the purchase of a house? What is the benefit of the MLS? How is the real estate agent compensated, and by whom?

Q:

Bond 1 is a 1 0 - year bond issued by Deloitte ( which has a great credit rating ) . Bond 2 is also a 1 0 - year bond issued by Enron ( which is financially struggling ) . Which is MOST likely? a )...

Q:

Can you elucidate the role of molecular chaperones and protein quality control systems in maintaining the integrity and homeostasis of the cytoplasm, particularly under conditions of cellular stress...