Hi All, Was looking over the sample solution for the summary report for this past paper on rebalancing of portfolios. I note that the question instructed us to model the following: Option C: Each year, invest $1,000 and rebalance the portfolio at the end of each year, where the split each year is determined by his age at that time, such that the equity percentage is 105% minus his age. Mr Brown is currently exactly 25 so the initial percentage is 80% in the equity fund. Isn't this worded wrong? I figure that it should read something like "(105 minus his age)%" or "105 minus his age, divided by 100" or "105% minus his age/100"... since technically speaking 105% minus 25 would give 1.05 - 25 = -23.95 (which ofc doesn't make sense)... In my attempt (before looking at the sample solution) this is what I referred to it as, but in looking at the solution I saw it said it in the same way as the question - would I have been penalised for this in the exam? Thanks in advance, ~P
Hello, I would not worry much about wordings. Stick to the methodology that you have been asked to do and also document each steps not forgetting to signpost. As long your method of communication is clear to the audience and also consistent with your calculations, you will not be penalised in any way.
