Problem
Identification of an optimal portfolio choice between fixed income and equity markets.
Based on the historical performance (risk, return, correlation) of the bond and stock market (it can be just at the broad market index level), as w ell as current market outlook, recommend a portfolio that offers the best risk- -adjusted expected return (or best return measure for giv en lev el of risk). Your portfolio can be an equity index, a bond index, or an optimal combination of both. Justify your choice. Comment on practical issues on implementing the strategy.