SECTION 5. LO. F, G.

12. C is correct. In the aftermath of a recession, value stocks outperform growth stocks, cyclical

(consumer discretionary) stocks tend to outperform non-cyclical (consumer staples) stocks,

and small-cap companies are likely to outperform large-cap companies. The model’s rotation

strategy of shifting from the small-cap to large-cap stocks will not be beneficial for the equity

funds. Section 6.5. LO.k.