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please help. thumbs up if all correct. Thank you (Security market line) Your father just leamed from his financial advisor that his retirement portfolio has
please help. thumbs up if all correct. Thank you
(Security market line) Your father just leamed from his financial advisor that his retirement portfolio has a beta of 1.66. 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 6 percent. b. The value of the market portfolio drops by 6 percent. C. Is your father's retirement portfolio more or less risky than the market portfolio? Explain. (Security market line) You are considering the construction of a portfolio comprised of equal investments in each of four different stocks. The betas for each stock are found below: Asset Beta COO B D 2.30 0.80 0.40 -1.40 a. What is the portfolio beta for your proposed investment portfolio? b. How would a 25 percent increase in the expected return on the market impact the expected return of your portfolio? c. How would a 25 percent decrease in the expected return on the market impact the expected return on each asset? d. If you are interested in decreasing the beta of your portfolio by changing your portfolio allocation in two stocks, which stock would you decrease and which would you increase? Why Step by Step Solution
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