Q1. Portfolio Rebalancing You have 100 million dollars in your investment account and choose to...
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Q1. Portfolio Rebalancing You have 100 million dollars in your investment account and choose to keep your money allocated in the following proportion and rebalance each quarter: i. 60% in stocks via ETF SPY; ii. 35% in bonds via ETF TLT. iii. 5% in cash Over the month of Sep, SPY went from $452 to $429, and TLT went from $149 per share to $144 per share. Cash has an interest rate of 0.1% annually.
b. How do you rebalance your account to keep the allocation at 60-35-5 for SPY TLT and cash respectively? What to buy and what to sell in dollar amount? (5 points)?
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