Which of the following investment strategies focuses on price discrepancies within the market?

The investment strategy that centers on price discrepancies within the market is tactical asset allocation. This approach is characterized by the flexibility it offers investors to adjust their investment mix based on short-term market conditions and perceived mispricings of assets. Tactical asset allocation seeks to take advantage of market inefficiencies by shifting an investor's portfolio allocation toward asset classes expected to perform well and away from those anticipated to underperform.

This strategy relies on active decision-making and market analysis, which differentiates it from other, more static strategies. For instance, passive investment strategies typically involve minimal buying or selling, aiming to mirror the performance of specific indices rather than exploiting price discrepancies. Similarly, long-term buy and hold focuses on maintaining investments over a longer horizon without adjusting for market inefficiencies. Index investing, by design, aims to replicate market indices, thereby not engaging in attempts to take advantage of pricing variances.

By focusing on tactical asset allocation, an investor actively analyzes the market for opportunities created by price discrepancies, allowing for strategic investments that can maximize returns based on perceived misvaluations.