L19=Client Profile
our 30-year-old client has $100,000 to invest and willing to assume a moderate amount of risk, but she would also like to have $10,000 available for a down payment on a home in 6 months. Which of the following asset allocation strategies would best suit her situation?
70% large-cap stock fund, 20% balanced fund, 10% money market fund
Which of the following should be the first step taken by the financial planner?
Establish an emergency fund
It is generally accepted that agents and IARs will give greater consideration to which of the following when making recommendations to their senior clients?
Life stage Retirement savings
An individual with $100,000 to invest will require these funds in 6 months for the purchase of a house. In which of the following circumstances did the agent act CORRECTLY?
The agent convinced the client to invest in a Treasury bill on the basis of its safety.
Tactical Evaluation and Research (TEAR), a federal covered investment adviser, suggests the purchase of stock in a major tobacco company. The client explains that he doesn't want to invest in tobacco stocks because his father passed away from lung cancer. What kind of reason is this?
Values
An investor who purchases stock in two technology companies with high projected earnings and growth potential but little performance history is considered
an aggressive investor
Liquidity constraints arise from
an investor's need for spendable cash.
An investment adviser using an insurance approach to capital needs analysis would
determine the insurance coverage needed to complete the customer's financial objective should the customer die before the objective is met
An investment adviser would be least likely to gather information about a new client
from social media.
A 69-year-old client of yours indicates that she is interested in changing the portfolio mix of her IRA. She wishes to sell most of the bonds in the account and replace them with 3x leveraged ETFs. You would probably infer from this that the client
has insufficient retirement savings
An investor concerned about preservation of capital would be most apt to purchase
investment-grade corporate bonds
Most studies have indicated that seniors with insufficient retirement savings attempt to compensate by being tempted to
reach for higher returns to maximize retirement assets.
One point to remember is that municipal bonds (or municipal bond funds) will never be the correct investment choice unless the question states
that the client is in a high tax bracket or is looking for tax-free income.
One of the tasks of an investment adviser representative is gathering information to complete a client financial profile. Among the sources of this information would be all of the following
the client's life insurance policies. the client's tax returns. the client's bank and brokerage statements.
a standard used to determine whether a particular mutual fund is suitable for an individual investor?
time horizon, risk tolerance, and existing portfolio components help determine investment suitability.
