For an Investor with a Time Horizon of 5 Years

question 52

Multiple Choice

For an investor with a time horizon of 5 years and moderate risk tolerance,an appropriate asset allocation strategy would be

• A) 100% cash
• B) 30% cash, 50% bonds, and 20% stocks
• C) 20% cash, 40% bonds, and 40% stocks
• D) 10% cash, 30% bonds, and 60% stocks
• E) 100% bonds

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Definitions:

Patents

Legal rights granted to inventors, allowing them exclusive use and exploitation of their inventions for a certain period.

Unrealized Intercompany Profits

Profits arising from transactions between entities within the same group that have not yet been realized by selling the goods or services to an external party.

Cumulative Dividends

Dividends on preferred shares that accumulate and must be paid out before any dividends can be distributed to common shareholders.

Consolidated Cost

The total cost that combines figures from various subsidiaries of a parent company into one aggregated total.