Answer:
Step-by-step explanation:
To make a prediction about the change in the value of a portfolio in response to a change in the value of its underlying assets, you would need to know the composition of the portfolio and the sensitivity of each asset in the portfolio to changes in the underlying asset.
Assuming that you have this information, you can calculate the portfolio's sensitivity to changes in the underlying asset, which is commonly known as its "beta." Beta is a measure of the volatility of an asset or portfolio in relation to the overall market.
Once you have calculated the portfolio's beta, you can use it to predict how the portfolio will respond to changes in the underlying asset. Specifically, if the underlying asset changes by $0.6, you would multiply this change by the portfolio's beta to get the expected change in the value of the portfolio.
For example, if the portfolio has a beta of 1.5, you would expect the value of the portfolio to change by 1.5 times $0.6, or $0.9. This means that if the underlying asset increases by $0.6, you would expect the value of the portfolio to increase by $0.9, and if the underlying asset decreases by $0.6, you would expect the value of the portfolio to decrease by $0.9.