D 1 You are given the following returns for the S&P500 and the Lehman Brothers Bond Index for the years 1995 through 1999. Assume you begin 1995 2 with $50,000 in each of the two indexes which means that your desired asset allocation is 50% in stocks and 50% in bonds. Using the rate of return 3 eamed in each year for each index, compute the value of your portfolio at the end of each year 4 1999 5 1996 1992 1998 7 5&P500 5 50,000 38.10% 24.00% 36.50% 8 Bond Index $ 42 203 28 JON 50.000 15 SOX 3.60 9.60% 70 0.80 0 10 First assume that you do not rebalance annually to that 11 the balances in each of the stock and bond portions of the portfolio simply grow by the rate of return for each of the indeses each year 12 How much would you have in toda and bonds at the end of each yearl How much would you have in total at the end of 1997 What proportion of 11 of the portfolio de stocks and bonds make up of the portfolio at the end of 1907 is the same 50/50 allocation you started with 14 15 16 Without rebalancing 1995 1996 1997 1998 12 Balances 18 SEP500 19 Bond Index 19 Proportionater