I saw this question as an interview, and to be honest, I have no idea what it's even asking for:
Write a function (in R or Python) that finds the stock drawdown which will trigger a rebalance, if given:
an X% stock (vs bond) target allocation; and
a Y% drift threshold from target allocation.
Do I pick a drawdown figure (20%?) and then calculate how much stocks need to fall to hit 20% portfolio DD given x% in stocks?
Do bond returns stay constant?
Same thing with the 2nd question, I just don't seem to understand what they are asking?
Any help appreciated!