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: Â Â Â Â Â Â Â Â Â
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. Â 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%.