The statement buy&hold risk tolerance varies greater porportionately with wealth is correct or not? why?
curricum V6, Page 101, it mentions we get the loan, then sell the stock to pay back the loan is the way variable prepaid forward doing, I would like to know whether there is a forward contract invlved in this kind of strategy, if it is yes, what’s the re;ationship between forward and loan?
buy and hold is do nothing strategies. so you have a initial floor and stock, and you leave them for gorwth.
if your stock grows, and you are not doing anything to reduce that position, your stock allocation will be higher and higher (or lower) and your risk tolerance will be higher(lower) accordingly.
the second question is regarding using variable prepaid forward to reduce the concentration of low cost basis stock risk, I want to know how forward contract is using