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(5)
                                                                               (8)
                               (3)
                                          (4)
              (1)
                                                             (6)
                     (2)
                                                                     (7)
                                       Value of
             Stock  Value of
                                                                              Total
                             Value of
             Price
                                                                   Action
                                                 of Constant  (4): (3)
                                                                             No. of
            Index   Buy-and-  Conservative  Aggressive   Total Value   Ratio  Revaluation   Shares
                    Hold
                                       Portfolio
                            Portfolio
                                                   Ratio
                   Strategy   (Col.5-Col.4)  (Col.8xCol.1)   Portfolio         in
                  (800 shares                    (Col.3+Col.4)             Aggressive
                   xCol.1)                                                  Portfolio
                    (Rs.)     (Rs.)      (Rs.)      (Rs.)
                                                                                         Unit 14: Portfolio Revision
            25    20,000      10,000    10,000      20,000   1.00             400
            23    18,400      10,000     9,200      19,200   0.92             400
            22.5   18,000     10,000     9,000      19,000   0.90             400
                                                                                                Notes
            22.5   18,000      9,500     9,500      19,000   1.00   Buy 22.2   422.2
                                                                  Shares
                                                                  at 22.5 *
            20.25   16,200     9,500     8,540      18,040   0.90   Buy 23.7   422.2
            20.25   16,200     9,020     9,020      18,040   1.00             445.9
                                                                  Shares
                                                                  at 20.25
            20    16,000       9,020     8,910      17,930   0.99             445.9
            22.4   17,920      9,020     9,920      18,940   1.10             445.9
            22.4   17,920      9,470     9,470      18,940   1.00   Sell 20.1   445.9
                                                                  Shares
                                                                  at 22.4
            24.6   19,920      9,470    10,430      19,900   1.10             425.8

              (1)    (2)      (3)        (4)        (5)      (6)     (7)       (8)
             Stock   Value   Value of   Value of   Total Value   Ratio  Revaluation   Total
             Price   of   Conservative   Aggressive   of Constant   (4):   Action   No. of
             Index   Buy-   Portfolio   Portfolio   Ratio    (3)             Shares
                    and-
                           (Col.5-Col.4)  (Col.8xCol.1)   Portfolio            in
                    Hold                         (Col.3+Col.4)              Aggressive
                   Strategy                                                 Portfolio
                    (800
                   shares
                   xCol.1)
                     ( )      ( )        ( )        ( )
              24.6   19,920   9,950     9,950      19,900   1.00   Sell 19.5   406.3
                                                                   Shares
                                                                   at 24.6
              27.0   21,600   9,950     10,950     20,900   1.10              406.3
              27.0   21,600   10,450    10,450     20,900   1.00   Sell 18.5   387.8
                                                                   Shares
                                                                   at 27.0
              28.8   23,040   10,450    11,170     21,620   1.07              387.8
              27.0   21,600   10,450    10,450     20,900   1.00              387.8
              25    20,000   10,450     9,670      20,120   0.93              387.8

          * To  restore the  ratio from  .90 to  1.00, total  value of  the fund,   19,000,  is simply  split  in  two  equal
          segments of   9,500; and   9500/9,500 = 1.00. The   500 transferred from the conservative portfolio will
          buy 22.2 Shares at the prevailing price of   22.50.

               You may notice that the constant-ratio plan calls for more transactions than the constant-
               dollar-value plan did, but the actions triggered by this plan are less aggressive. This plan
               yielded an increase in total value at the end of the cycle compared with the total value
               yielded under constant-dollar-value plan. It did, however, outperform the buy-and-hold
               strategy. Let us now explain and illustrate variable-ratio plan.
          5.   Variable-ratio Plan: Variable-ratio plan is a  more  flexible variation  of constant  ratio
               plan. Under the variable ratio plan, it is provided that if the value of aggressive portfolio
               changes by certain percentage or more, the initial ratio between the aggressive portfolio
               and conservative portfolio will be allowed to change as per the pre-determined schedule.
               Some variations  of this plan provide for the ratios to  vary according  to economic  or




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