Risk Profile Question

CFA Level III
#1

Jay, aged 30, is not wealthy. Kevin, aged 50, has significant net worth. Lee, aged 70, is independently wealthy. Which of the following relationships regarding their optimal investment policies is most accurate? A) Kevin should be more aggressive than Jay, who should be more aggressive than Lee. B) Jay should be more aggressive than Kevin, who should be more aggressive than Lee. C) Lee should be more aggressive than Kevin, who should be more aggressive than Jay.

#2

C

#3

C Wealth level dominates age.

#4

I agree ^^

#5

c for me too

#6

Hmm I am against the crowd but I think the answer should be A…the last guy is too old to take more risk compared to the other two. Wealth dominates but no consideration for age at all?

#7

I will go with B.

#8

heeralm, If you are independently wealthy , you really don’t care about age… You can invest aggressively. Answer should be C

#9

I see your point … but am thinking more on a relative basis in comparison with the other two…this old guy should be somewhere in the middle. Let’s see Dwight can we have the answers :slight_smile:

#10

I’m also on board with C Independently wealthy allows for a higher ability to take risk.

#11

Yeah C is the answer. If I post it too soon, someone complains, if I wait to long, someone complains. =P

#12

heeralm I made the same mistake. You have to get out of the mindset that younger = more risk. That is something that has been drilled into me and that I have to unlearn for CFA purposes. The wealth card trumps the age card.

#13

got it now. This helps. How about this the questions posted on a particular day remain open for the entire day (accounting for all timezones) and then the answers must be posted the following day atleast? wat say

#14

helpful explanations!

#15

heeralm@gmail.com Wrote: ------------------------------------------------------- > got it now. This helps. > > How about this the questions posted on a > particular day remain open for the entire day > (accounting for all timezones) and then the > answers must be posted the following day atleast? > wat say I try to post answers whenever I feel there is the most “momentum” for lively discussion. If a bunch of posters put up their guesses right away then I usually post the answer. If answers trickle in over the course of a day or so, then I wait a while so that a number of people will have skin in the game.