Risk Tolerance

In: Business and Management

Submitted By l642453404
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WHAT’S YOUR RISK TOLERANCE? Circle the letter that corresponds to your answer
1. Just 60 days after you put money into an investment, its price falls 20%. Assuming none of the fundamentals have changed, what would you do?
a. Sell to avoid further worry and try something else
b. Do nothing and wait for the investment to come back
c. Buy more. it was a good investment before ;now it’s cheap investment , too
2. Now look at the previous question another way. Your investment fell 20% , but it’s part of a portfolios being used to meet investment goals with three different time horizons 2A. What would you do if the goal were five years away?
a. Sell
b. Do nothing
c. Buy more 2B. What would you do if the goal were 15 years away?
a. Sell
b. Do nothing
c. Buy more 2C. What would you do if the goal were 30 years away?
a. Sell
b. Do nothing
c. Buy more
3. The price of your retirement investment jumps 25% a month after you buy it .again, the fundamentals haven’t changed after you finish gloating, what do you do? a. Sell it and lock in your gains b. Stay put and hope for more gain c. Buy more; it could go higher
4 you’re investing for retirement, which is 15years away. Which would you rather do?
a. Invest in a money-market fund or guaranteed investment contract, giving up the possibility of major gains, but virtually assuring the safety of your principle
b. Invest in a 50-50mix of bond funds and stock funds, in hopes of getting some growth, but also giving yourself some protection in the form of steady income
c. Invest in aggressive growth mutual funds whose value will probably fluctuate significantly during the year, but have the potential for impressive gains over five or 10 years
5. You just won the big prize! But which one? It’s up to you. a. a. $2,000 in cash b. a 50% chance to win $5,000 c. a 20% chance…...

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