For an Investor with a Time Horizon of 15 Years

question 20

Multiple Choice

For an investor with a time horizon of 15 years and moderate risk tolerance,an appropriate asset allocation strategy would be

• A) 100% stocks
• B) 40% cash and 60% stocks
• C) 30% cash, 50% bonds, and 20% stocks
• D) 50% bonds, and 50% stocks
• E) 20% bonds, and 80% stocks

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Definitions:

Precious Metals

Metals of high economic value such as gold, silver, platinum, and palladium, often used in jewelry, industrial applications, and as investment.

Dividend-payout Policy

A company's approach to distributing earnings to its shareholders, either in the form of cash dividends or stock repurchases.

Marginal Tax Bracket

The tax rate that applies to the last dollar of the taxpayer's income, indicating the rate at which additional income will be taxed.

After-tax Return

The profit from an investment after all taxes have been subtracted, indicating the net gain to the investor.