Mr.

Mr. Sharma manages a portfolio with an initial corpus of ₹ 10,00,000. He is evaluating dynamic portfolio rebalancing strategies. For the CPPI (Constant Proportion Portfolio Insurance) policy, he sets a floor value of ₹ 7,50,000 and uses a multiplier of 2. Initially, the portfolio is evenly split with ₹ 5,00,000 in equity and ₹ 5,00,000 in risk-free bonds. Shortly after investing, the equity market experiences a sharp decline of 20%, while the bond value remains unchanged.