Question 4 Consider a portfolio with an initial value of $100 that is invested in stocks and bonds using one of two rebalancing strategies: a constant-mix (CM) strategy that invests 75% of the portfolio in stocks and a constant proportion portfolio insurance (CPPI) strategy that invests in stocks 150% of the difference between the portfolio and floor value, assumed to be $50. Suppose stocks decrease by $30 in period 1 and then increases by 20% in period 2, while bonds have a 0% return for both periods. Calculate the stock, bond, and portfolio values under the CM and CPPI strategies (a) (i) At the beginning. (ii) At period 1, before rebalancing. (iii) At period 1, after rebalancing. (iv) At period 2. (b) (4 marks) (3 marks) (4 marks) (6 marks) Using your results from part (a), explain the difference in the portfolio performance under the rebalancing strategies. (4 marks)