CFAI Raading 26 Question 1B relating to rebalancing in strategic asset allocation references Brinson, Hood and Beebower. I can’t find this in the CFAI text…any ideas? I actually found that question worded very poorly, I had no idea what it was they were asking for! (native English speaker) Why not just ask “What is the effect of the follwing on strategic asset allocation?, a) rebalancing more frequently, b) investing activley” etc
You find it in pg 230. The study finds asset allocation explains over 90% of portfolio returns, so the more the company rebalances, the closer it is to the strategic portfolio thus the more strategic mix plays in the portfolio’s return over time. Agree that the wording in both the text and the question is hard to understand.