Which of the Following Individuals Would a Portfolio Containing 80

question 5

Multiple Choice

Which of the following individuals would a portfolio containing 80 to 90% in common stocks be appropriate for?

• A) John and Vanessa, a retired couple in their mid-60s
• B) Michelle, a divorced middle-aged mother who has custody of her children, ages 2 and 6, and earns $60,000 a year in salary
• C) Meredith and Joe, a blue-collar, two-income family with 2 children, both of whom will be starting college within the next 3 years
• D) Ryan and Ramona, newlyweds who are in their mid-20s, have steady jobs, and are putting money aside for retirement
• E) Antonio and Lora, a couple in their mid-50s who earn a combined $150,000 in salary and are planning to retire in 10 years

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Definitions:

Overjustification Effect

A psychological effect where introducing external rewards for an activity previously enjoyed for its own sake reduces intrinsic motivation to perform that activity.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow that prioritizes human needs from the most basic (physiological) to higher-level needs (self-actualization).

Social Diffusion

The process by which attitudes, innovations, or behaviors spread within a population or social network.

Reference Group

Any group that individuals use as a standard for evaluating their own behavior, values, or attitudes, influencing decision-making and perceptions.