rebalancing ratio =
A. old DD/new DD
B. old DD/new DD -1
Confused by the official answer of 2011 exam.
rebalancing ratio =
A. old DD/new DD
B. old DD/new DD -1
Confused by the official answer of 2011 exam.
(Old DD / new DD - 1 ) X MV of portfolio = cash required to rebalance
Old DD / new DD = Rebalancing Ratio
^ Yes.
what would be the answer to cash required if RR is less than 1. would you write sell bonds?
yes.
One with the highest duration = controlling position–will reduce the cash required to rebalance…