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Use this information to answer #14, #15 and #16.

Exactly fifteen years ago, Marco's parents invested $90,000 into two mutual funds: the ABC Canadian Bond Fund ($27,000) and XYZ Canadian Equity Fund ($63,000) they have not made any additional purchases and neither of the funds have paid any distributions. At the time of their original investment, their stated risk tolerance indicated that a Balanced Growth (70% Equity / 30% Fixed Income) asset allocation was appropriate for them. However, a newly completed KYC indicated that they should have a Conservative (30% Equity / 70% Fixed Income) asset allocation.

Both of the funds have performed very well as can be seen from the following chart:

Fund	Original Investment	Current Market Value
ABC Canadian Bond Fund	$27,000	$43,231
XYZ Canadian Equity Fund	$63,000	$141,449

Marco's parents have booked an appointment with you to withdraw $32,000 from the account for completing basement renovations.

Based on the above information, which specific buy and sell trades would you recommend?

Question 14 options:

	SELL: $95,645 of the CANADIAN EQUITY FUND BUY: $63,645 of the CANADIAN BOND FUND
	SELL: $62,850 of the CANADIAN EQUITY FUND BUY: $92,400 of the CANADIAN BOND FUND
	SELL: $90,500 of the CANADIAN EQUITY FUND BUY: $90,500 of the CANADIAN BOND FUND
	SELL: $75,550 of the CANADIAN EQUITY FUND BUY: $ 88,350 of the CANADIAN BOND FUND
	SELL: $36,500 of the CANADIAN EQUITY FUND BUY: $96,250 of the CANADIAN BOND FUND

Question 15 (2 points)

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If you were to recommend the buy and sell amounts from question #15, what would you need to inform Marco's parents about?

1. The will be tax consequences on the capital gain
2. There will be no tax consequences on the capital gain
3. Their portfolio should experience both higher volatility and a higher rate of growth going forward
4. Their portfolio should experience both lower volatility and a lower rate of growth going forward

Question 15 options:

	1 and 2
	1 and 4
	2 and 3
	3 and 4
	None of the choices are correct

Question 16 (1 point)

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Which of the following is a reason why these trades are appropriate for Marco's parents

Question 16 options:

	The rebalance brings the asset allocation in line with their stated and current risk tolerances
	The rebalance positions the portfolio for higher returns moving forward
	Marco is a subscriber to the technical analysis methodology
	Marco doesn't have a pension

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