Suppose $60-$year$-$old Mrs$.$ Smith, who has a conservative approach to investing and is five years away from retirement, has a strategic asset allocation of $50\%$ equities $/40\%$ fixed income $\frac{?}{10}\%$ cash. Assume Mrs$.$ Smith has a $$500,000$ portfolio and rebalances her portfolio annually. In one year's time, suppose the equity component of the portfolio has generated total returns of $10\%$ while fixed income has returned $5\%$ and cash $2\%.$

What are the Adjustments that needs to be made to get back to the Strategic Asset Allocation

What was the EOY allocation for Fixed Income

Choose...

Choose...

$$46,000$ from the Cash component has to be sold $39\mathrm{.}47\%$

$$46,000$ from the equity component has to be sold $$7,200$ from the equity component has to be sold $19\mathrm{.}17\%$

$41\mathrm{.}35\%$