You Are a Financial Advisor and a Client Tells You

question 29

Essay

You are a financial advisor and a client tells you he is concerned about the amount of risk in his portfolio. Assuming your client hasn't already done them, what two things can you suggest to reduce your client's risk? What additional information about reducing risk should you provide?

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Definitions:

Deficit

The amount by which expenses or costs exceed income or revenues, especially in the context of government budgets.

Surplus

A condition where the quantity supplied of a good exceeds the quantity demanded at the current price.

Inflation

The pace at which average prices for products and services climb, reducing the value of money.

U.S. Exports

Products and services created in the United States and exported to foreign nations.