Practice exam volume 1 2AM Question 1 -Ability to take risk; in the answer book it is below average, stated because liquidity constraints are high / when you do the calc its only 3.1% of the portfolio. 116,438/3,750,000 Anyone else think the people at Kaplan were on crack when they came up with this one?
ah didn’t see the other post, even tried to search for this one, figured someone on here must have felt the same. Def think I’ll stick with my gut with the above-average ability to take risk.
I e-mailed schweser about this before and this is the response I got: "I see what you are saying about the expenditures as a percentage of assets, but in this case, the Smyths are in their wealth accumulation stage of life and are spending more than they earn, meaning that they can only increase their wealth through their portfolio returns. In other words, they have to survive off of their portfolio for a very long period of time as their portfolio covers most of their expeditures. "