to occur: (Security market line) Your father just learned from his financial advisor that his retirement portfolio has a beta of 1.78. 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 a. The value of the market portfolio rises by 9 percent. b. The value of the market portfolio drops by 9 percent. c. Is your father's retirement portfolio more or less risky than the market portfolio? Explain. a. If the value of the market portfolio rises by 8%, then the value of your father's retirement fund should by %. (Select from the drop-down menu and round the answer to two decimal places.) b. If the value of the market portfolio drops by 9%, then the value of your father's retirement fund should c. Your father's retirement portfolio is risky than the market portfolio because your father's retirem by %. (Select from the drop-down menu and round the answer to two decimal places.) systematic risk, is than the market's portfolio beta. (Select from the drop-down menus.) increase decrease

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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quiz 8-13

to occur:
(Security market line) Your father just learned from his financial advisor that his retirement portfolio has a beta of 1.78. 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
a. The value of the market portfolio rises by 9 percent.
b. The value of the market portfolio drops by 9 percent.
c. Is your father's retirement portfolio more or less risky than the market portfolio? Explain.
a. If the value of the market portfolio rises by 8%, then the value of your father's retirement fund should
by %. (Select from the drop-down menu and round the answer to two decimal places.)
b. If the value of the market portfolio drops by 9%, then the value of your father's retirement fund should
c. Your father's retirement portfolio is risky than the market portfolio because your father's retirem
by
%. (Select from the drop-down menu and round the answer to two decimal places.)
systematic risk, is
than the market's portfolio beta. (Select from the drop-down menus.)
increase
decrease
Transcribed Image Text:to occur: (Security market line) Your father just learned from his financial advisor that his retirement portfolio has a beta of 1.78. 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 a. The value of the market portfolio rises by 9 percent. b. The value of the market portfolio drops by 9 percent. c. Is your father's retirement portfolio more or less risky than the market portfolio? Explain. a. If the value of the market portfolio rises by 8%, then the value of your father's retirement fund should by %. (Select from the drop-down menu and round the answer to two decimal places.) b. If the value of the market portfolio drops by 9%, then the value of your father's retirement fund should c. Your father's retirement portfolio is risky than the market portfolio because your father's retirem by %. (Select from the drop-down menu and round the answer to two decimal places.) systematic risk, is than the market's portfolio beta. (Select from the drop-down menus.) increase decrease
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