Desired level of risk for joanne portfolio

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You work as a portfolio manager for an investment fund. You have a meeting with one of your clients, Joanne Siegal, who wants to review her investment objectives. At present, Joanne holds a well-diversified portfolio of equity securities, but the market beta of her portfolio is higher than the market beta of the market portfolio. Joanne would like to reduce the risk exposure of her portfolio so that the market risk of her portfolio is lower than that of the market. Based on your understanding of security market line (SML), explain the actions that you could take to achieve the desired level of risk for Joanne's portfolio. What are the possible consequences of those actions.

Reference no: EM133061063

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