Question
A) As a portfolio manager, you apply dynamic allocation. Your 62-year old client with the following portfolio information needs your help to split her money
A) As a portfolio manager, you apply dynamic allocation. Your 62-year old client with the following portfolio information needs your help to split her money into equity and bond positions. How much does she need to invest in each of these asset classes? Please show your work. m = 1.5 Portfolio current value = $1,500,000 Floor: $500,000 B) What are your thoughts on your final answer in part (A)? Do you think this asset allocation is appropriate for your client? C) Because of the pandemic, stock market crashed and your client lost 1/3 of his portfolio value. Assuming that she did not lose value of her bond portfolio, what adjustments do you recommend for her stock and bond allocation
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