Question
At the beginning of the year you opened your first IRA. You have decided upon a 90% stock, 10% bond asset allocation, with annual rebalancing.
At the beginning of the year you opened your first IRA. You have decided upon a 90% stock, 10% bond asset allocation, with annual rebalancing. Today is the day for your first rebalancing and you are nearly giddy with excitement. You would like to reset your portfolio to the 90/10 weighting scheme. Using the information listed below, what should you do?
Group of answer choices
Sell 12.9 shares of the stock fund and use the cash generated to buy 16.09 shares of the bond fund.
Sell 12.9 shares of the bond fund and use the cash generated to buy 28.29 shares of the stock fund.
Buy 317.43 shares of the bond fund and sell 81.98 shares of the stock fund.
Sell 89 shares of the stock fund and use the cash generated to buy 10 shares of the bond fund.
None of the above
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started