canadiananalyst

Answer does not mention cash anywhere:

In a convex strategy, the manager buys stocks when they go up and sells them when they go down. Hass is using a concave strategy, selling winners to buy back into losing positions. However, we can tell that Hass is using a tolerance band of more than 3%. Because he buys into positions down 4% from the target, his tolerance band is no less than 4%. But because he did not sell the hedge fund, we can assume his tolerance band is more than 3%, because the hedge fund is up to 3% above the target allocation.