The problem is easy, I just wanted to verify one thing:
The two reasons it gives for CPPI are
1.) it dynamically provides a floor alue consistent with Kilpatrick’s objectives
2.)When equities are trending up, CPPI will buy equities, constant mix will sell equities, and buy-and-hold will make no transactions. The greater investment in equities with CPPI allows Kilpatrick to minimize exposure to risk-free securities in rising equity markets, consistent with her objectives.
I basically said the same thing #2 did, and also added that the trending market would result in CPPI outperforming due to buying on rises and selling on declines. I didn’t say the floor value thing because I thought buy and hold did that too (just not dynamically) but the question didn’t say Kilpatrick mandated the floor be dynamic. Isn’t the 1st answer inapporpriate in this case? (yes i know i’m overthinking it, but it’s a valid point IMO)