Portfolio Management Q144
- -The client has earnings that have exceeded $150,000 (pre-tax) each year for the past four years and has no dependents. The client’s basic needs are approximately $49,500 per year.
- -The client states that he feels particularly uncomfortable with his limited understanding of securities markets.
- -All of the client’s current savings are invested in short-term securities guaranteed by an agency of her national government. The client responded to a standard risk assessment questionnaire suggesting that he has low risk tolerance.
The client is best described as having a:
- Option : C
- Explanation : On one hand, the client has a stable, high income and no dependents. On the other hand, he exhibits above average risk aversion. His ability to take risk is high, but his willingness to take risk is low.
