Answer:
To rebalance this portfolio back to its original asset allocation, you should sell some of your __equities_________ and use the proceeds to purchase additional shares of ___bonds ___and____cash investments___.
Explanation:
a) Data:
Assets allocation Plan After Year 1 Rebalancing
Bonds 40% 30% 40% (30% + 10%)
Equities 40% 60% 40% (60% - 20%)
Cash investments 20% 10% 20% (10% + 10%)
Total Portfolio 100% 100% 100%
b) To rebalance this portfolio, 20% of equities need to be sold. The proceeds will be utilized to buy more bonds to increase it by 10% and also buy more cash investments, increasing it also by 10%.