Which management strategy involves actively making decisions about portfolio securities?

The correct answer, which is active management, involves making ongoing decisions regarding the buying and selling of portfolio securities with the aim of outperforming a specific benchmark or index. Active managers research and analyze different securities to identify those that will perform well based on various factors, such as economic data, market trends, and individual company performance. This strategy allows for flexibility and the potential to capitalize on short-term market opportunities or discrepancies in pricing.

In contrast, passive management involves a strategy where the portfolio is not actively adjusted but instead mirrors the performance of a specific index, aiming to achieve market returns rather than exceed them. Strategic management refers to longer-term planning and decision-making processes that can include setting objectives and resource allocation, but does not specifically focus on the frequent trading of securities. Quantitative management uses mathematical models and quantitative analysis to inform investment decisions, but again, it does not emphasize active decision-making regarding individual securities to the same extent as active management does.