From Schweser’s Question Bank of Reading 32, “considering the equity tendencies of high yield bonds”; so high yield bonds have equity tendencies? In what sense?
What can be said about the current allocations? A) Not aggressive enough. B) Properly diversified. C) Too aggressive.
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References
Considering the Jones are very close to retirement, the current equity portion of the portfolio should be reduced. At 65%, it could be debated that equities are properly represented, but, considering the equity tendencies of high yield bonds, this pushes the allocation to 95%. With no cash, liquidity will need to be increased to fund their living expenses.