Corridors.......

CFA Level III
#1

So i think this is where he real world experience will hurt me on the exam…

In the CFAI book… when an asset class goes out of the corridors… either above or below, you are supposed to rebalance ALL asset classes?

In the real word, we only rebalance that specific asset class with maybe 1 or 2 other asset classes…

#2

You rebalance all classes. See, for example, CFA 2010 AM Q8, if any classes are outside the tolerance band all asset classes are rebalanced to target weights.

#3

How do you rebalance one asset class without selling/buying the others?

#4

Sometimes the masses are oblivious to the obvious.