CFAI 2001 Exam Time Horizon #9A

How do they still consider Stephenson’s time horizon long term? He is 75 years old yet they claim his time horizon is in excess of 10 yrs. I know 10 plus years is long term but life expectancy is under 80. The only way to justify this is that he is building in a safety net if he lives longer. Are we suppose to just assume this because no where in the case does it say anything about that? By the way I thought this exam was pretty easy, I hope we get one like this! -Thanks.

I guess because they didnt state he was in bad health or anything like that you should assume he could still live anotehr 10 years at least, heck more people are livng to 100 nowadays. I will assume LT unless facts in the case state otherwise.

Have you seen what a lifetime of drinking does to somebody by the time they’re 75?

No, but I’ll let you know in 45 years or so