A portfolio has a market value of $2 million. The investment policy statement requires a target asset allocation of 50 percent stock and 50 percent bonds. After one quarter the portfolio market value is $2.5 million. However, the stock to bond allocation has become 60/40. 

How should the portfolio manager rebalance this portfolio?

Answer rating: 100% (QA)

To rebalance the portfolio the portfolio manager needs to adjust the asset allocation to bring it ba... View the full answer