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Your father just learned from his financial advisor the his retirement portfolio has a beta of 1. He has return to you to explain to him what this..

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Your father just learned from his financial advisor the his retirement portfolio has a beta of 1.75. He has return 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 8%

b) The value of the market portfolio drop by 8%

c) Is your father’s retirement portfolio more or less risky tha the market portfolio. Explain

a) If the value of the market portfolio rises by 8% then the value f your father’s retirement should (decrease or increase )by ….. ( two decimal places)

b) If the value of the market portfolio drop by 8% then the value f your father’s retirement should (decrease or increase )by ….. ( two decimal places)

c) Your father’s retirement portfolio is ( more or less risky) than the market portfolio because your father’ retirement portfolio beta, its systematic risky is ( less or greater) than the market portfolio be.

 
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