Which of the following approaches is NOT a component of Liability-Relative Asset Allocation?

Liability-Relative Asset Allocation focuses on aligning an investment portfolio with the specific liabilities that an organization or individual faces. This approach emphasizes managing both assets and liabilities in a coordinated manner to optimize the return on assets while ensuring that sufficient funds are available to meet future liabilities.

Surplus optimization involves structuring an investment portfolio to maximize the surplus, which is the difference between assets and liabilities. This is a fundamental aspect of liability-relative asset allocation, as it directly addresses how to best utilize available resources to meet obligations.

Hedging/return-seeking portfolios pertain to managing risk while simultaneously pursuing returns. This dual focus helps ensure that the portfolio can not only cover liabilities as they come due but also provide growth, essential for maintaining solvency over time.

Integrated asset-liability management considers both assets and liabilities together instead of separately, offering a holistic view of financial strategy. This integration is crucial for ensuring that the investment strategy effectively meets liability requirements.

In contrast, active equity trading is not inherently a component of Liability-Relative Asset Allocation. While it may serve a purpose in generating returns, it does not specifically relate to aligning investments directly with liabilities or managing the overall asset-liability relationship. Instead, active trading is typically more aligned with total return strategies rather than the