The equity market has trended upward. Your equity exposure, which was $600,000 of a total portfolio of $1,000,000 has increased by 20%. Your overall portfolio, which contains equity, debt and some cash is now valued at $1,150,000. You have to determine if it is time to rebalance your portfolio and follow a new investment strategy.

You had determined to systematically rebalance annually to maintain a corridor of +/- 5% for equity. Given the constraint, you should :

A. reallocate an additional $50,000 to equity

B. reallocate the entire $120,000 to debt and cash

C. make no adjustments