Your friend tells you that the Prudent Mutual Fund gives you more downside protection than buying an exchange traded fund (ETF)that mimics the market portfolio.What is he telling you about the fund's Beta?

Question

Quizplus · Accepted Answer

If a fund gives you more "downside protection" than the market index, that means that the fund's returns fall more slowly than the returns on the market in Bear markets. If that is true, then the Beta of the fund is less than one.

Your Friend Tells You That the Prudent Mutual Fund Gives