Liam is 28 years old and saving toward his retirement in 35 years. In his RRSP he owns 1,000 shares of Royal Bank of Canada valued at $98 each and $125,000 principal value of 4.5% Government of Canada 20-year bonds. The bonds trade at a premium of 30%. Liam wishes to sell his investments and purchase a mutual fund.
Part a
What is Liam's asset allocation? Is it appropriate, and why?