R17 Principles of asset allocation practice paper CFAI

Anyone tried question 2 of this practice paper yet?

This really got me tripping.

I’m guessing that usually, higher risk/higher volatility should have narrower corridor so that you don’t deviate from IPS, however, since this is specifically related to transaction costs, it would require a narrower corridor to avoid frequent rebalancing/higher transaction costs.

Definitely a tricky question/answer, I hope we won’t have many of these to deal with.