When a portfolio is not actively managed to maintain a fixed investment percentage in each asset but rather maintains a fixed number of shares for each asset, the portfolio weights will change over time because the market returns of the different assets will not be the same. Consequently, portfolio betas computed as a linear combination of asset…

While financial planning students are expected to be able to understand client retirement plans, subtle differences in cost-of-living adjustments can have major impact on the success of client retirement plans. This teaching note compares the cost-of-living adjustments in the largest government sponsored retirement systems and a hypothetical…

An educational example is presented that is an effective teaching illustration to help students understand the difference between traditional CAPM beta and downside (or down-market) beta and why downside beta is a superior measure for use in personal financial planning investment policy statements.