How would you find the beta of a 529 plan, for example California’s plan, ScholarShare 529?

Solutions

Expert Solution

529 plan is an education plan which is basically focused at tax exemptions and one need to invest in these plans to get the tax exemptions and these 529 plans are often embedded with various mutual fund houses like Vanguard provides with 529 plan which is embedded with the Vanguard 500 index funds and it is generally a passive investment so it is often having a market beta of 1, because it is just replicating the rate of return of the standard and poor 500 so we will have to consider the type of the plan and the structure of the plan & it can either be active or passive.

529 plans investments are specific in nature and if they are investing into multiple companies which are having high beta, then we will have to calculate the beta of the portfolio and accordingly we will have to adjust the beta but if they are having passive investment like when Vanguard, then we will be taking the beat of 1 as it will be e replicating the rate of return of the index.

Hence, Beta of these 529 plans are specific in nature according to the shares they are holding and sensitiveness to Maket index.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

How do I find an expected return (Ke) of a 529 college savings plan? There are...

How do I find an expected return (Ke) of a 529 college savings plan? There are no dividends and sites like Yahoo Finance do not provide growth rates. If I am looking back to previous years, would the Ke be the actual growth rates achieved?

Describe how you would re-create a local government system in California’s metro regions. You do not...

Describe how you would re-create a local government system in California’s metro regions. You do not need to talk about specific regions—focus on general principles that can apply to all major metro areas. 2. What type of relationship should there be between local governments (e.g., competition, cooperation, etc.)?

Give an example of how you would develop a patient education plan for Diabetes Mellitus II?

Explain beta concept and how can you find the beta of an asset or portfolio? Identify...

Explain beta concept and how can you find the beta of an asset or portfolio? Identify key components of the CAPM model. What is SML? What method would you use to establish risk and return relationships?

What is a business plan? Where can you find an example of one?

Find an example of application of Hypothesis testing that you can relate to (any example would...

Find an example of application of Hypothesis testing that you can relate to (any example would be OK using Z test you can consult HW Batch No. 4 or textbook). Show all five steps of Hypothesis testing with numerical example (you can use fictitious numbers if you have to). And find the P-Value and re-affirm Step 4 with P-Value.

You are to post an example of a business plan you developed. Select a plan that...

You are to post an example of a business plan you developed. Select a plan that you are most proud, and would wish to share with potential employers and others as a testament to the quality of your work, as well as the skills you offer their organizations. Recommended sections are as follows: - Executive Summary - Mission, Vision, and Culture - Company Summary - Market Analysis Summary - Strategies and Implementation Summary - Management and Operations Summary - Financial...

Question