Your father just learned from his financial advisor that his retirement portfolio has a beta of 1.82. He has turned t
Posted: Thu May 19, 2022 12:29 am
Your father just learned from his financial advisor that his
retirement portfolio has a beta of
1.82.
He has turned to you to explain to him what this means.
Specifically, describe what you would expect to happen to
the value of his retirement fund if the following were
to occur:
a. The value of the market portfolio rises by
10
percent.
b. The value of the market portfolio drops by
10
percent.
c. Is your father's retirement portfolio more or less
risky than the market portfolio? Explain.