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4. Buy and Hold investment strategy (5 points) Buy and hold is an often-suggested passive investment strategy. Consider a young investor who decides to follow

4. Buy and Hold investment strategy (5 points)

Buy and hold is an often-suggested passive investment strategy. Consider a young investor who decides to follow a simple Buy and Hold (BH) strategy with initial allocation of 60% in US equity and 40% in US bonds. How might the portfolios exposure toward the US equity change after 30 years? Explain the underlying mechanism that generates the changes.

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