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An investor has decided to rebalance by selling some assets in order to buy those that have lagged behind. The desired allocation is 80% equity
An investor has decided to rebalance by selling some assets in order to buy those that have lagged behind. The desired allocation is 80% equity and 20% debt. There are currently have $100,000 in equities and $15000 in debt. How much of which asset has to be sold in order to buy the necessary amount of the other asset to bring the portfolio back into balance?
Show that the portfolio is back in balance after making the transactions.
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