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3. (4 pts) Allocation - Assume you have $ 100,000 to invest for 1 year, and decide to allocate 60% to an all equity fund
3. (4 pts) Allocation - Assume you have $ 100,000 to invest for 1 year, and decide to allocate 60% to an all equity fund trading at $400 per share and 40% to a bond fund trading at $100 per share. After 1 year, the equity fund is trading at $450 per share and the bond fund is trading at $95 per share. (a) What is the value of your portfolio after 1 year? (b) What is 1 year rate of return on your portfolio? (c) What are the allocations of your portfolio after 1 year? (d) How do you rebalance your portfolio to maintain allocations at 60/40
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